The overriding goal for merging is to
A) increase cash flows.
B) maximize operating efficiency.
C) maximize shareholder wealth as reflected in the acquirer's share price.
D) maximize shareholder wealth as reflected in the share price of the target firm.

Question

Quizplus · Accepted Answer

The primary objective of any merger or acquisition is to enhance shareholder value, which is reflected through an increase in the acquirer's share price. The merger should result in positive synergies and efficiencies that help increase profitability and cash flows, which ultimately translates into higher share prices. Therefore, the correct option is C - maximize shareholder wealth as reflected in the acquirer's share price.

The Overriding Goal for Merging Is to