The empirical evidence strongly indicates that, while target ﬁrm shareholders achieve large wealth
gains in the event of a takeover bid, acquiring ﬁrm shareholders gain little, if anything. Although
there exists no deﬁnitive answer as to why this is the case, several possible explanations have been
proposed. List and explain three such explanations.

Question

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The Answer of The empirical evidence strongly indicates that, while target ﬁrm shareholders achieve large wealth
gains in the event of a takeover bid, acquiring ﬁrm shareholders gain little, if anything. Although
there exists no deﬁnitive answer as to why this is the case, several possible explanations have been
proposed. List and explain three such explanations.

The Empirical Evidence Strongly Indicates That, While Target ﬁRm Shareholders