(TCO I) Regarding takeover defenses, what has been the general impact of legislation? (10 pts.) What has been the impact of court decisions? (10 pts.) According to Jensen’s studies (1988), what is the...

Regarding takeover defences, what has been the general impact of legislation? (10
pts.)
Takeover bids are mainly motivated by the acquirers profit prospects, shareholders
objectives to improve the firm’s position. These bids impact the resource allocation
efficiency of the firm. Anti-takeover laws have resulted in significant rise in the
takeover premiums. In addition, they reduce the stock values. This legislation, in a
nut shell, raises both the costs as well as the benefits of an aggressive takeover
strategy. Increase in costs results increases motivation of managers to take up a
more holistic approach to extract synergies from post takeover integration. The
legislation for takeover defences impacts various parameters such as the share
prices, takeover premium and the takeover activity. However, they do not impact the
profitability of the firm.
What has been the impact of court decisions? (10...