On average,shareholders of
A)the target firm benefit from mergers.
B)the target firm benefit from cash mergers and incur losses in stock mergers.
C)the acquiring firm benefit the most from a merger.
D)the target firm suffer losses when a merger occurs.
E)both the acquiring and target firms incur losses when firms merge.

Question

Quizplus · Accepted Answer

On average, shareholders of the target firm benefit from mergers. While there may be cases where the target firm suffers losses, studies have shown that in the majority of cases, the target firm's shareholders see an increase in their stock prices following a merger. Additionally, the acquiring firm may also see benefits from the merger, such as increased market share or cost savings, but overall, the target firm tends to benefit as well. Therefore, option A is the most accurate statement.

On Average,shareholders of