Asked by Julianne Marie on May 04, 2024
Verified
Which of the following factors is most likely a reason for the failure of a merger or acquisition?
A) The size of the workforce of the acquiring firm was bigger than that of the acquired firm.
B) The new business was too far from the areas of expertise of the acquiring firm.
C) The accounting systems of both firms were different.
D) The parent firm incurred high levels of research-and-development expenditure.
Accounting Systems
The methods and processes used by organizations to track and manage financial transactions, assets, and liabilities.
Research-And-Development
The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.
- Identify the key factors leading to the failure or success of mergers and acquisitions.
Verified Answer
ZK
Zybrea KnightMay 08, 2024
Final Answer :
B
Explanation :
The success of a merger or acquisition often hinges on the acquiring firm's ability to integrate and manage the new business effectively. When the new business is too far from the areas of expertise of the acquiring firm, it can lead to challenges in understanding the market, managing operations, and leveraging synergies, thereby increasing the likelihood of failure.
Learning Objectives
- Identify the key factors leading to the failure or success of mergers and acquisitions.
Related questions
Which One of These Factors May Influence the Success Rate ...
What Was One of the Key Factors That Resulted in ...
The Majority of Mergers and Acquisitions Achieve Expected Results,so PR ...
McLaughlin Describes the Intensity of the Commitment That Two or ...
In Financial Mergers, the Acquiring Company May Not Have Any ...