Researchers Have Found That Shareholders of Acquired Firms Often

question 64

Multiple Choice

Researchers have found that shareholders of acquired firms often:

• A) earn above-average returns.
• B) earn below-average returns.
• C) earn close to zero as a result of the acquisition.
• D) are not affected by the acquisition.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members. It is the share of profits and retained earnings that the company distributes to its shareholders.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a certificate.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price, often used by investors to assess the income-generating ability of a stock.

Market Price

The current price at which a good or service can be bought or sold in the open market.