Studies of acquisitions and mergers suggest that shareholders of the:
A) Bidding ﬁrm beneﬁt the most from a merger.
B) Bidding ﬁrm average at least a 5% excess return on a merger.
C) Target ﬁrm have the most to gain from a merger.
D) Bidding ﬁrm beneﬁt in equal proportion to the shareholders of the target ﬁrm.
E) Target ﬁrm beneﬁt more if a proxy contest develops.

Question

Quizplus · Accepted Answer

Studies have shown that the target firm's shareholders benefit the most from a merger. This is because the acquisition often results in a premium being paid for the target firm's shares, which can lead to immediate gains for its shareholders. Additionally, the target firm may also see improvements in operational efficiency and increased growth opportunities as a result of the merger.

Studies of Acquisitions and Mergers Suggest That Shareholders of The