When a publicly traded firm is acquired by another firm, the purchase price is almost always less than the target firm's market value.

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When a publicly traded firm is acquired by another firm, the purchase price is often higher than the target firm's market value, as the acquiring firm is willing to pay a premium to gain control of the target firm's assets, resources, technology, and/or customer base. However, there are cases where the purchase price may be below the target firm's market value, especially if the target firm is facing financial distress or has poor performance, or if the acquiring firm is able to negotiate a lower price due to market conditions or bargaining power.

When a Publicly Traded Firm Is Acquired by Another Firm