Which of the following strategies can enhance the target company's performance during a merger?

Refinancing existing debt can significantly enhance a target company's performance during a merger by potentially lowering interest costs and improving cash flow. By taking advantage of lower interest rates or better financing terms, a company can reduce its debt burden, which can enhance profitability. This can provide more capital for investment in growth initiatives, streamline operations, and ultimately create value for both shareholders and stakeholders during the merger process. Reducing financial obligations through effective debt management can also improve a company's leverage and make it a more attractive partner in a merger, facilitating better terms and conditions throughout the transaction.

In contrast, leaving operational strategies unchanged may hinder the ability to realize synergies from the merger, while increasing non-core asset holdings can divert resources from the main business focus, potentially reducing overall efficiency. Reducing focus on core capabilities could weaken the company's competitive advantage and operational effectiveness, impacting long-term performance negatively.