How might the form of payment affect the abnormal return to sellers and buyers?

Question

Quizplus · Accepted Answer

The Answer is Abnormal returns to sellers are much smaller when the seller receives cash rather than buyer equity. Asset for buyer equity sales generate excess returns of about 10 percent for buyers and 3 percent for sellers. The higher returns for buyers may reflect information communicated to the seller not generally known by the investing public about the synergy between the divested asset and the buyer's operations and the overall future earnings potential of the buyer's business. In contrast, excess returns to sellers receiving cash average about 3 percent for sellers and about zero for buyers.

How Might the Form of Payment Affect the Abnormal Return