Managers of bidding firms continue to engage in merger or acquisition strategies even though they usually do not generate profits for bidding firms in order to
A) ensure survival.
B) generate free cash flow.
C) reduce agency problems.
D) reduce managerial hubris.

Question

Quizplus · Accepted Answer

Managers of bidding firms engage in merger or acquisition strategies to ensure survival. These strategies may help the firm to increase its market share, gain access to new markets or technologies, or reduce competition. In the long run, these benefits may help the firm to remain competitive and survive in the industry. However, these strategies may not generate profits for bidding firms in the short run, as they often involve significant costs and risks.

Managers of Bidding Firms Continue to Engage in Merger or Acquisition