All of the following statements are correct EXCEPT:
A) immediately after the announcement of a planned acquisition, the stock price of the majority of acquiring firms declines.
B) shareholders of acquired firms often earn above-average returns from an acquisition.
C) the majority of acquisitions increase long-term value for the acquiring firm.
D) shareholders of acquiring firms typically earn returns from the transaction that are close to zero.

Question

Quizplus · Accepted Answer

Studies have shown that the majority of acquisitions actually decrease long-term value for the acquiring firm, making statement C incorrect.

All of the Following Statements Are Correct EXCEPT