Studies show that mergers generally do not create shareholder value. While some mergers may lead to short-term gains, in the long-term, most mergers do not result in increased profitability or shareholder value. It is also important to note that not all companies need to be merged; companies that are performing well (i.e. 'cash cows') may not benefit from being merged with other companies.

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Studies Show That

Question 13

Multiple Choice

Studies show that

A) mergers create considerable shareholder value.
B) mergers lead to economic profit.
C) mergers generally do not create shareholder value.
D) 'dogs' and 'cash cow' do not need to be merged.

Correct Answer: