The empirical evidence strongly indicates that the stockholders of the target ﬁrm realize large
wealth gains as a result of a takeover bid but the stockholders in the acquiring ﬁrm gain little, if
anything. Although there exists no deﬁnitive answer as to why this is the case, several possible
explanations have been proposed. List and explain three of these possible explanations for the
minimal returns to the acquiring ﬁrm's stockholders.

Question

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The Answer of The empirical evidence strongly indicates that the stockholders of the target ﬁrm realize large
wealth gains as a result of a takeover bid but the stockholders in the acquiring ﬁrm gain little, if
anything. Although there exists no deﬁnitive answer as to why this is the case, several possible
explanations have been proposed. List and explain three of these possible explanations for the
minimal returns to the acquiring ﬁrm's stockholders.

The Empirical Evidence Strongly Indicates That the Stockholders of the Target