While Acquisitions Offer an Enticing Means for Entering a New

question 44

Multiple Choice

While acquisitions offer an enticing means for entering a new business,many fail to deliver on their promise,as they:

• A) require successful integration of the culture,systems,and structure of the firm into the acquiring firm,which is a costly and time-consuming process.
• B) require an in-depth understanding of the firm so as to develop potential strategic responses to the target market.
• C) indicate that the premium paid for the company was far too high for what assets the acquiring firm purchased,and therefore failed the cost-of-entry test.
• D) require managerial attention at the highest level and this cannot always be provided.
• E) All of these.

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Definitions:

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when entrusted with care of money or property.

Votes

Formal indications of a choice made from among options or decisions, often used in the context of elections or decision-making processes in organizations.

Revised Model Business Corporation Act

An updated model statue designed to serve as a comprehensive guide for the structuring and governance of corporations in the United States.

Fiduciary Duty of Care

A legal obligation of one party to act in the best interest of another when entrusted with the care of their assets or interests.