The risk of failure of an acquisition can be reduced by
A) undervaluing the assets of an acquired firm.
B) ensuring that firms are acquired in the home country.
C) replacing high-level managers of an acquired firm.
D) a detailed auditing of operations, financial position, and management culture.
E) investing only in a firm that is managing to break even.

Question

Quizplus · Accepted Answer

Conducting a detailed auditing of operations, financial position, and management culture helps in understanding the true value and potential risks associated with the acquisition, thereby reducing the risk of failure.

The Risk of Failure of an Acquisition Can Be Reduced