All of the given statements are correct except the majority of acquisitions increase long-term value for the acquiring firm.
Answer: Option C
Explanation:
Acquisition can be very strategic for companies as it is a process by which one company buys some or all of the shares of other company and assimilate in itself. It is very commonly seen that the stock price of the acquiring firms declines once the announcement of planned acquisition is made.
One of the interesting aspects of acquisition is that shareholders of acquiring firms usually earn very little returns which are almost zero whereas the shareholders of acquired firms earn returns above the average returns.
