Management's Propensity to Overestimate the Value of the Target Company

question 93

Multiple Choice

Management's propensity to overestimate the value of the target company in a merger can lead to:

• A)financial disaster for the acquiring company.
• B)a financial windfall for the stockholders of the target company.
• C)an irrational transfer of wealth from the shareholders of the acquirer to those of the target.
• D)All of the above

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Definitions:

Operant Principles

Operant Principles refer to concepts in behavioral psychology where behaviors are shaped or modified based on the consequences they produce, such as reinforcement or punishment.

Psychological Disorders

Patterns of behavioral or psychological symptoms that impact multiple areas of life and/or create distress for the person experiencing these symptoms.

Systematic Desensitization

A therapy technique used to overcome phobias and anxiety disorders by gradually exposing the patient to the feared object or context without any danger, in order to overcome their anxiety.

Deep Relaxation

A state of physical and mental calm, often achieved through techniques such as meditation, controlled breathing, or progressive muscle relaxation.