The accumulation of a target firm's stock by arbitrageurs makes purchases of blocks of stock by the bidder easier.

Question

Quizplus · Accepted Answer

When arbitrageurs accumulate a target firm's stock, it can create a more liquid market for the stock which can make it easier for the bidder to purchase blocks of the stock in the open market. This is because there are more potential sellers and the stock may be traded more frequently, allowing the bidder to build up their position more quickly.

The Accumulation of a Target Firm's Stock by Arbitrageurs Makes