Shareholders of U.S.targets experience higher wealth gains when they are acquired by foreign firms than when acquired by U.S.firms.

Question

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Several studies have demonstrated that shareholders of U.S. targets experience higher wealth gains when they are acquired by foreign firms than when acquired by U.S. firms. This is because foreign firms offer higher premiums and have fewer regulatory and legal constraints, allowing them to pay more for the target company. Additionally, foreign acquiring firms may have unique capabilities and resources that can help the target company grow and succeed in the global market.