Researchers have found that shareholders of acquired firms often:
A) earn above-average returns.
B) earn below-average returns.
C) earn close to zero as a result of the acquisition.
D) are not affected by the acquisition.

Question

Quizplus · Accepted Answer

Shareholders of acquired firms often earn above-average returns because acquiring companies typically pay a premium over the market price to gain control of the target company.

Researchers Have Found That Shareholders of Acquired Firms Often