Which of the following statements would not be a valid or logical reason for entering into a business combination?
A) to increase market share.
B) to avoid becoming a takeover target.
C) to reduce risk by acquiring established product lines.
D) the operating costs of the combined entity would be more than the sum of the separate entities.

Question

Quizplus · Accepted Answer

The goal of a business combination is often to achieve synergies that result in lower overall operating costs, increased efficiency, or enhanced market power. If the operating costs of the combined entity would be more than the sum of the separate entities, it contradicts the typical financial objectives of mergers and acquisitions, making it an invalid reason for pursuing a business combination.

Which of the Following Statements Would Not Be a Valid