Acquiring firms often overpay for the assets of the acquired firms. I

QUESTION

Acquiring firms often overpay for the assets of the acquired firms.

Indicate whether the statement is true or false.

ANSWER

TRUE
Acquisitions fail for several reasons. First, the acquiring firms often overpay for the assets of the acquired firm. The price of the target firm can get bid up if more than one firm is interested in its purchase, as is often the case