What makes private equity firms target a publicly traded company for takeover?

A new study from the University of Iowa finds that private equity is often likely to target firms that more aggressively manage their earnings to meet analysts’ quarterly expectations.

Paul Hribar, professor of accounting in the Tippie College of Business, said this phenomenon is called earnings myopia because managers are overly focused on near-term earnings at the expense of long term growth and value creation. READ MORE