Which of the Following Is One of the Reasons Why

question 3

Multiple Choice

Which of the following is one of the reasons why acquisitions fail?

• A) There is a clash between the cultures of the acquired and the acquiring firms.
• B) The acquired firm often overpays for the assets of the acquiring firm.
• C) The synergies of the two firms happens quickly and neither acquired nor acquiring firm are prepared for full integration.
• D) Despite adequate pre-acquisition screening, the entities encounter unexpected governmental involvement.

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Definitions:

Stockholders' Equity

The ownership stake of shareholders in a corporation, symbolized by the value of the company's assets once all debts are subtracted.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income.

Retrospective Approach

An accounting method that applies new accounting policies to transactions, other events, and conditions as if the new policy had always been in place.

Accounting Principle

Fundamental guidelines or rules that form the basis for financial accounting and reporting practices.