Which of the following best describes why defensive mergers typically occur?
A)Defensive mergers occur as a result of shareholders' needs to maximize personal wealth.
B)Defensive mergers occur as a result of unions' actions to maximize shareholders' wealth.
C)Defensive mergers occur as a result of government policies to maximize shareholders' wealth.
D)Defensive mergers occur as a result of managers' actions to maximize shareholders' wealth.

Question

Quizplus · Accepted Answer

Defensive mergers typically occur as a result of managers' actions to maximize shareholders' wealth. The purpose of these mergers is to prevent a hostile takeover or to strengthen the company's competitive position in the industry. Managers may feel pressure from shareholders to take action to protect their investments, and a defensive merger can be an effective way to do so.

Which of the Following Best Describes Why Defensive Mergers Typically