Which of the following reasons is least likely to explain takeover activity?
A)Target companies are undervalued.
B)The presence of economies of scale in servicing shareholders.
C)Increased market power resulting from takeovers.
D)There are tax benefits.

Question

Quizplus · Accepted Answer

While economies of scale can be a reason for takeover activity, it is the least likely reason compared to the other options. Target companies being undervalued, increased market power resulting from takeovers, and tax benefits are all more common reasons for takeover activity.

Which of the Following Reasons Is Least Likely to Explain