According to the hubristic motive,a winning acquirer may suffer from what is called the ''winner's curse'' when:
A) the market price of target firms do not reflect their intrinsic value.
B) multiple firms are bidding for multiple targets.
C) the winner has overpaid during an acquisition.
D) the winner has not paid the acquisition premium.

Question

Quizplus · Accepted Answer

The "winner's curse" refers to the situation where the winning bidder in an auction ends up overpaying for an asset, often due to overestimation of its value or competitive pressure, which is consistent with the hubristic motive in acquisitions.

According to the Hubristic Motive,a Winning Acquirer May Suffer from What