Market-based studies are associated with positive wealth effects for takeovers,yet studies using accounting numbers have not found this.A possible explanation for this discrepancy is that:
A)some takeovers are good investments whilst others are bad investments.
B)benefits of a takeover may take years to be fully reflected in accounting earnings.
C)market-based studies suffer from potential measurement problems.
D)benefits of a takeover may take years to be fully reflected in accounting earnings and that market-based studies suffer from potential measurement problems.

Question

Quizplus · Accepted Answer

The benefits of a takeover may take years to be fully reflected in accounting earnings and there could also be potential measurement problems with market-based studies. Therefore, both market-based and accounting-based studies can provide different perspectives on the effects of takeovers.

Market-Based Studies Are Associated with Positive Wealth Effects for Takeovers,yet