Without Effective Due Diligence, The

question 83

Multiple Choice

Without effective due diligence, the:

• A) acquiring firm is likely to overpay for an acquisition.
• B) firm may miss its opportunity to buy a well-matched company.
• C) acquisition may deteriorate into a hostile takeover, reducing the value-creating potential of the action.
• D) firm may be unable to act quickly and decisively in purchasing the target firm.

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Definitions:

Months

Units of time, each roughly equivalent to one twelfth of a year, used in planning and organizing.

Rate Of Interest

The percentage of the principal that will be charged for a particular period of time, normally one year.

Interest

The charge for borrowing money or the return on deposited funds, typically expressed as a percentage rate over a period of time.

Simple Annual Interest Rate

The percentage of the principal amount that will be charged or earned as interest, calculated once per year without compounding.