Which One of These Is the Best Justification for Acquiring

question 31

Multiple Choice

Which one of these is the best justification for acquiring a firm?

• A)Increasing the bidder firm's sphere of political influence
• B)Managing a larger firm to justify higher management salaries
• C)Desire to control more employees
• D)Creating financial value by combining the bidder and target firms
• E)Creating accounting goodwill

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Definitions:

Rationalization

A defense mechanism where controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner.

Freudian Component

Elements of Sigmund Freud's psychoanalytic theory which include the id, ego, and superego, responsible for different aspects of human personality and behavior.

Ego

A component of Sigmund Freud's model of the psyche that mediates between the demands of the id, the superego, and the external world, playing a crucial role in decision making and reality testing.

Unconscious

Refers to the part of the mind that contains thoughts, memories, and desires not within the sphere of current awareness but that nonetheless influence behavior.