Because of hubris,managers of acquiring firms often believe their valuation of a target firm is superior to the market's valuation.Consequently,they often end up overpaying for the firm.True and False

Question

Quizplus · Accepted Answer

Managers of acquiring firms often have a high level of confidence in their ability to evaluate a target firm, which can lead to overestimating the value of the firm and overpaying for it. This is known as acquisition hubris. Therefore, the statement is true.

Because of Hubris,managers of Acquiring Firms Often Believe Their Valuation