Tom Copeland,Tim Keller,and Jack Morrin,on their book Valuation,Measuring and Managing the Value of Companies,observed that acquirers paid too much for companies because of all but one of the following reasons:
A)market potential greater than estimated.
B)overoptimistic appraisal of market potential.
C)overestimation of synergies.
D)poor due diligence.
E)overbidding.

Question

Quizplus · Accepted Answer

The correct reason that does not fit the observation by Copeland, Keller, and Morrin is A) market potential greater than estimated. This is because paying too much for companies is typically associated with overestimations or errors in judgment (like overoptimism, overestimation of synergies, poor due diligence, or overbidding), rather than underestimating a company's market potential.

Tom Copeland,Tim Keller,and Jack Morrin,on Their Book Valuation,Measuring and Managing