- CFA Exams
- CFA Exam: Level II 2021
- Study Session 8. Corporate Finance (2)
- Reading 23. Mergers and Acquisitions
- Subject 9. Who benefits from mergers?
CFA Practice Question
Based on past empirical results, the characteristics of M&A deals that create value for acquirers are:
II. The transaction premiums are relatively low.
III. The number of bidders is high.
IV. The initial market reaction is favorable.
I. The seller is strong.
II. The transaction premiums are relatively low.
III. The number of bidders is high.
IV. The initial market reaction is favorable.
Correct Answer: II and IV
Correct statements: I - The buyer is strong. III - The number of bidders is low.
User Contributed Comments 2
| User | Comment |
|---|---|
| ehc0791 | III is opposite of explaination |
| quanttrader | create value by minimizing bid price |