In an Economic Sense, Goodwill Created in an Acquisition Represents

question 105

True/False

In an economic sense, goodwill created in an acquisition represents blue sky, that is, the acquiring firm is essentially paying a premium for the purchase and getting nothing of value for this part of the price.

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Definitions:

Dispositional Attribution

The tendency to attribute someone’s behavior to their internal characteristics or personality rather than to external factors.

Self-Serving Bias

A cognitive bias that involves taking personal credit for success while blaming external factors for failures.

Bystander Effect

A social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present.

Actor-Observer Effect

The tendency to attribute one's own actions to external factors, while attributing others' actions to their personality.