Empirical Evidence Indicates That the Returns to Shareholders of the Target

question 49

Essay

Empirical evidence indicates that the returns to shareholders of the target firm vary significantly from the returns to the shareholders of the acquiring firm.Identify the shareholders that tend to realize the smaller return and provide some possible explanation for these low returns.

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Definitions:

Separate Legal Entity

The principle that a corporation exists separately from the people who created it.

Unanimous Shareholders' Agreement

An agreement among all shareholders of a corporation, often detailing the management, control, and direction of the corporation's affairs.

No Restrictions

A condition or status where there are no limitations, constraints, or regulations imposed on actions or activities.

Fiduciary Duty

A legal obligation for one party to act in the best interest of another party, such as a trustee for a beneficiary.