Shareholders of U.S.bidders (acquiring firms in M&A)experience significant positive abnormal returns when firms expand into new industries and geographic markets.

Question

Quizplus · Accepted Answer

This statement is true. Shareholders of U.S. bidders experience significant positive abnormal returns when firms expand into new industries and geographic markets through M&A transactions. This is because such expansion is seen as a positive signal of growth potential and diversification opportunities, which can lead to increased profitability and future value for the acquiring firm.