The continuing popularity of mergers and acquisitions among companies despite the lack of empirical evidence of their benefits suggests:
A)Many mergers and acquisitions are motivated by growth rather than profitability
B)Mergers and acquisitions by the leading firms in an industry promotes imitation by other firms in the industry
C)Both (a)and (b)
D)Both (a)and (b)plus the fact that most investment analysts view takeovers as a sign of a dynamically-managed company.

Question

Quizplus · Accepted Answer

The fact that mergers and acquisitions continue to be popular despite the lack of empirical evidence suggests that many of these deals are motivated by a desire for growth rather than profitability. Additionally, the leading firms in an industry engaging in such deals may promote imitation by other firms in the industry. Both of these factors likely contribute to the persistence of mergers and acquisitions as a strategy.

The Continuing Popularity of Mergers and Acquisitions Among Companies Despite