Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

Key words
: acquisition, cash financing 
INTRODUCTION 
The purpose of this study is to examine factors that motivate the use of cash financing in acquisitions in the 
hospitality industry. During the twenty year period from 1980 to 2000, cash was the dominant method of payment 
for acquisitions in the hospitality industry (see Table 1). Cash payments were used in seventy-five percent of 
hospitality acquisitions while stock financing was used in only fourteen percent of acquisitions (the remaining 
twenty percent of acquisitions were financed with a mix of cash and stock). Thus it is important to understand why 
cash financing in hospitality industry is preferred.