Financing Corporate Acquisition by Selected Public Listed Companies on Bursa Malaysia: Cash versus Equity

This study aims to examine the factors determining the choice of financing an acquisition by selected public listed companies on Bursa Malaysia based on five variables: Value of Acquisition, Level of Shareholdings by Board of Directors and Substantial Shareholders, Net Assets and Gearing Ratio of the bidder companies. Empirical testing involves a binomial type of dependent variable whereby values 1 and 0 are assigned to represent choice of cash and equity financing, respectively. Probit regression is employed, but the results fail to provide proof of statistical significance for all variables. However, the analysis show corresponding signs of coefficients, which supports the direction of relationship as predicted in the hypotheses.