In a study of the effect of international acquisitions on the stock prices of U.S. firms. U.S. acquiring firms with information-based intangible assets experience a significantly positive stock price reaction upon foreign acquisition.
A)This is consistent with the finding that the market value of the firm is positively related to its multinationality because of the firm's intangible assets, such as R&D capabilities, with public good nature.
B)It is not the multinationality per se that contributes to the firm's value.
C)Their empirical findings support the (forward-) internalization theory of FDI.
D)All of the above

Question

Quizplus · Accepted Answer

The given statement is consistent with all the options provided. A explains that the positive stock price reaction is due to intangible assets of firms, B explains that it is not the multinationality that adds value, and C explains that the results support the internalization theory of FDI. Therefore, all options are correct.

In a Study of the Effect of International Acquisitions on the Stock