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

Studies have shown that on average, shareholders of the target firm benefit from mergers. This is because the acquiring firm usually pays a premium for the target firm's shares, leading to an increase in the target firm's share price. Additionally, mergers can lead to cost savings and other efficiencies that can benefit the target firm in the long run.

On Average,shareholders of