Please discuss whether you agree or disagree with the following statements and briefly explain your answers. Clarity is required in your answers to obtain higher marks. (32 marks) Qi. Mergers paid in cash result in increased leverage for the merged firm, which makes existing debt riskier and existing creditors worse off. Therefore, cash deals on average have worse performance compared to stock deals. (8 marks) Q2. On average, target firms earn positive abnormal returns when activists initially file a 13D form. However, hedge fund activism has a negligible impact on targeted firms because activists have very little power, as their ownership is often less than 1%. (8 marks)