Research Results Indicate All of the Following EXCEPT

question 97

Multiple Choice

Research results indicate all of the following EXCEPT:

• A) immediately after the announcement of a planned acquisition, the stock price of the majority of acquiring firms declines in the majority of cases.
• B) shareholders of acquired firms often earn above-average returns from an acquisition.
• C) the majority of acquisitions increase long-term value for the acquiring firm.
• D) shareholders of acquiring firms typically earn returns from the transaction that are close to zero.

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Definitions:

NPV

An evaluation method used to assess the profitability of an investment by calculating the difference between its current cash inflows and outflows, discounted to their present values.

IRR

Internal Rate of Return represents a financial measure for assessing the potential profitability of investments.

Marginal Cost

The cost added by producing one additional unit of a product or service.