Explain how researchers can study the effects of mergers on shareholder wealth.

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Explain how researchers can study the effects of mergers on shareholder wealth.

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Explain how researchers can study the effects of mergers on shareholder wealth.

Explanation & AnswerSolution by a verified expert

Explanation

Public company mergers and acquisitions have provided researchers with decades of information that can be used to determine the effect of such mergers on shareholder wealth. With available data, researchers can readily determine what the effects of mergers have been and how much of that resulted from the merger as opposed to longer term economic growth.

Verified Answer

Because securities prices for public companies are readily available, the consequences of mergers and acquisitions can be determined for any merger involving public companies and studied for periods both before and after acquisitions.

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