The statement that the undervaluation of targets is less likely to be the main reason for takeover activity is:

A.true as the bidding company management may have private information. B. false as bidding company management may be aware of alternative and/or better uses for the target's assets. C. false as markets have been shown to be inefficient. D. true as such opportunities are rarely found due to market efficiency.

The returns to acquirer shareholders may be explained by:

• a.tax loss benefits of a target.

• b. reduction in agency costs due to the method of financing the takeover

• c. acquirer management over-confidence in their valuation of targets.

• d. economies of scale in operations which may reduce costs.