Studies have shown that acquiring firm shareholders tend to realize minimal gains,if any,due to
A)the target firm and acquiring firm being too similar in size.
B)the target firm's being acquired for less than their true value.
C)merger gains being underestimated.
D)overinflated synergy estimates.
E)negative purchase premiums.

Question

Quizplus · Accepted Answer

Overinflated synergy estimates refer to the expectation that the acquiring firm will achieve greater cost savings and revenue growth through the merger than what is realistically possible. When these estimates are not achieved, shareholders of the acquiring firm may see minimal to no gains.

Studies Have Shown That Acquiring Firm Shareholders Tend to Realize