The distribution of synergistic gains between the stockholders of 2 merged firms is almost always based strictly on their respective market values before the announcement of the merger.

Question

Quizplus · Accepted Answer

The distribution of synergistic gains in a merger is not strictly based on pre-announcement market values; it can be influenced by negotiation, strategic considerations, and the relative bargaining power of the firms involved.

The Distribution of Synergistic Gains Between the Stockholders of 2