Company A acquires Company B, after this announcement, Company A's stock price rose, why is this so?
by 
Lucy
ANSWERS: 1
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In general, stock prices will rise upon expectation of profit and increased value. If company A is financially sound enough to aquire compay B, the expectation is that company A has passed various investigations and research regarding their financial condition, otherwise they would not have received any financing required to make the deal happen, nor would they have put themselves in a high risk situation. Aquiring company B is a demonstration of their sound financial condition. The acquiring of company B may also represent an increase in company A's self-sufficiency, or increases their production, or even expands their product lines. Each of these results of expansion produces the expectation of increased profitability. Hope this helps... ;-)
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