Year of Graduation
Mergers and Acquisitions: investment banker’s behavior and profitability of the deals
The aim of that research is to prove the need for a law regulating investment banker’s bonus compensation. That work checks the availability of opportunism in the behavior of employees of financial institutions. Next, research determines the relation of bonus payments to the various indicators of mergers and acquisitions, as well as methods of risk behavior of bankers (Tobit model). Further, work examines the effect of banks compensation and the results of transactions using premiums paid to target - companies (Model TSLS). Moreover, close attention was paid to the "intentional" overvaluation companies, which increases compensation for investment banking. The result showed that the introduction of the law should reduce the number of risky deals and increase stability of industries.