Which of the following is a reason why firms often overpay for the assets of an acquired firm?
A)studies supporting the rise of failed companies post acquisitions
B)evidence of high management turnover post acquisitions
C)the success rate of acquisitions exceeding that of failures
D)interest of more than one party in acquiring a particular firm
E)inevitable clash between cultures of acquiring and acquired firms

Question

Quizplus · Accepted Answer

When there is interest from multiple parties in acquiring a firm, it can create a bidding war, driving up the price of the assets. This can result in the acquiring firm overpaying for the acquired firm.

Which of the Following Is a Reason Why Firms Often