The empirical evidence strongly indicates that the stockholders of the target firm realize wealth gains while the stockholders in the acquiring firm gain little, if anything from an acquisition. Although there exists no definitive answer as to why this is the case, several possible explanations have been proposed.

Required:

List and explain three of possible explanations for the minimal returns to the acquiring firm's stockholders.

Answer rating: 100% (QA)

Integration difficulties The difficulty merging the operations and cultures of the target and acquir... View the full answer