Who benefits the most from the acquisition premium valued during an acquisition?

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The shareholders of the target firm benefit the most from the acquisition premium because they are receiving a higher price than what the market had valued their company at prior to the acquisition. The acquiring firm may benefit from the transaction in the long-term, but in the short-term, they are paying a premium to acquire the target company. Neither option C nor D is completely accurate as one group benefits more than the other. The shareholders of the target firm benefit the most from the acquisition premium. This is because the acquiring firm pays a higher price for the target company than its current market value, which results in a windfall for the target company's shareholders. On the other hand, the acquiring company's shareholders may see a short-term decline in their stock value due to the premium payment.

Who Benefits the Most from the Acquisition Premium Valued During