The shareholders of a target firm benefit the most when:
A) An acquiring firm has the better management team and replaces the target firm's managers.
B) The management of the target firm is more efficient than the management of the acquiring firm which replaces them.
C) The management of both the acquiring firm and the target firm are as equivalent as possible.
D) Their current management team is kept in place even though the managers of the acquiring firm are more suited to manage the target firm's situation.
E) Their management team is technologically knowledgeable yet ineffectivE.

Question

Quizplus · Accepted Answer

Shareholders of the target firm benefit the most when the acquiring firm has the better management team and replaces the target firm's managers. This is because a more efficient management team is expected to make better decisions and generate greater profits, resulting in higher returns for the target firm's shareholders.

The Shareholders of a Target Firm Benefit the Most When