Question:

Why do stocks rise after report of takeover news?

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Why do stocks rise after report of takeover news?

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3 ANSWERS


  1. If a stock is selling for $10 and the take over price is $15..... the price will naturally rise to reflect the new "value" of the shares.


  2. It means that the salary expense is going to go down because the new company usually goes in and axes all the employees at the company they buy.

  3. Because the acquirer is usually offering a premium above the current market price.

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