Takeover risk, Financial Management

If the issuer company is taken over, then the bondholders are likely to suffer. It is due to lowering of the stock prices in the market as a post takeover effect. As the stock of the acquired company may no longer trade after a takeover, the investor can be let with a bond that pays a lower coupon rate than comparable risk corporate bonds.

Posted Date: 9/10/2012 8:00:11 AM | Location : United States

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