Studies on merger activity across industries suggest that:
A) the stock price for the buying ?rm rises sharply post a merger.
B) almost all ?rms and industries have a tendency to deliver post-merger bene?ts.
C) mergers are relatively risk-free strategies for ?rms.
D) mergers increase ?rm size and can boost managers' pay.

Question

Quizplus · Accepted Answer

Mergers often lead to an increase in firm size, which can result in higher compensation for managers due to the increased complexity and responsibility of managing a larger organization. Choices A, B, and C are generally not supported by empirical evidence, as the stock price of the buying firm does not always rise sharply post-merger, not all firms and industries deliver post-merger benefits, and mergers are not considered risk-free strategies.

Studies on Merger Activity Across Industries Suggest That