The overriding goal for merging is to ________.
A) develop monopoly control over the markets
B) maximize shareholders' wealth as reflected in the acquirer's share price
C) maximize shareholders' profit as reflected in the share price of the target firm
D) maximize dividend payout ratio

Question

Quizplus · Accepted Answer

The main goal of mergers is to maximize the wealth of the acquirer's shareholders. This is usually accomplished by increasing the company's market share, diversifying its product line, or reducing operating costs, which ultimately lead to an increase in the share price. While monopolistic control may be a byproduct of a successful merger, it is not the primary goal. Increasing the dividend payout is not necessarily the focus of mergers, as the company may need to reinvest profits for growth.

The Overriding Goal for Merging Is to ________