Studies conducted on mergers and acquisitions have generally concluded that:
A) both acquiring and target firm's shareholders benefit approximately equally in most situations.
B) all involved shareholders tend to neither gain nor lose much as a result of these transactions.
C) only highly leveraged acquisitions produce any shareholder gains.
D) these transactions are financially beneficial to target shareholders.
E) acquiring firm's shareholders gain at the expense of the target firm's shareholders.

Question

Quizplus · Accepted Answer

Studies have shown that mergers and acquisitions are financially beneficial to target shareholders, with target firms typically experiencing an increase in the value of their shares following the transaction. However, the benefits to acquiring firm's shareholders are less clear-cut and may depend on various factors such as the type of acquisition and the premiums paid.

Studies Conducted on Mergers and Acquisitions Have Generally Concluded That