Research on bank mergers has generally found that the acquiring bank's stock price ____ at the time of the acquisition.

Question

Quizplus · Accepted Answer

Research has shown that in most cases, the acquiring bank's stock price declines or remains unchanged at the time of the merger. This is attributed to the uncertainties and risks associated with the integration process, potential cultural differences between the merging institutions, and the possibility of overpayment for the target bank. While there are cases where the acquiring bank's stock price rises moderately or substantially, they are not as common as the cases where the stock price declines or remains unchanged.

Research on Bank Mergers Has Generally Found That the Acquiring