Download or read book Two Essays on Leverage, Mergers and Acquisitions, and Institutional Investors written by Chune Young Chung and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In the first essay of my dissertation, I study how bidders' appetite for financial and operating (expected and unexpected) leverage of targets affects merger activities, and whether this appetite varies through the business cycle. I document evidence that bidders have a time-varying appetite for targets' leverages through the business cycle. The effect of financial and operating leverage on the likelihood of becoming a target of a takeover, likelihood of becoming an acquirer, the takeover premium, the announcement CARs of bidders, and long-run BHARs of bidders all depend on the business cycle. The time-varying effects of leverage on merger decisions are consistent with the time-varying benefits of financial and operating leverage, and uniquely capture the well-known time-varying risk in corporate investments.