Most acquirers pay an acquisition premium for a target. Upon announcement of the bid, the target's stock price increases, on average, so that the stock price is the same as the price bid by the acquirer.

Question

Quizplus · Accepted Answer

The target's stock price typically increases upon announcement, but it often does not reach the full bid price due to uncertainties about the deal's completion.

Most Acquirers Pay an Acquisition Premium for a Target