The expected acquisition of a firm typically results in ____ in the target's stock price.
A) an increase
B) a decrease
C) no change
D) none of the above

Question

Quizplus · Accepted Answer

The expected acquisition of a firm can lead to an increase in the target's stock price due to the anticipation of a premium being paid on the stock. As investors speculate on the potential acquisition, they will purchase shares of the target company, leading to increasing demand and an increase in the stock price. Additionally, the acquisition itself can provide benefits such as increased efficiency and synergies, which can further increase the value of the target company and its stock price.

The Expected Acquisition of a Firm Typically Results in ____