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.
