Synergistic gains
A)are obtained when the acquiring firm is greater in value than the stand-alone valuations of the target firm(s).
B)can only be obtained by increases in market power.
C)are obtained when the value of the combined firm is greater than the stand-alone valuations of the individual (acquiring and target)firms.
D)none of the options

Question

Quizplus · Accepted Answer

Synergistic gains are achieved when the combined value of the acquiring and target firms is greater than their individual valuations. This can come from cost savings, increased market power, and revenue enhancements. It is not necessary for the acquiring firm to be greater in value than the target firm for synergistic gains to be achieved.

Synergistic Gains