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

Question

Quizplus · Accepted Answer

The best justification for acquiring a firm is to create financial value by combining the bidder and target firms. This can be achieved through economies of scale, access to new markets, diversification of products and services, and synergies between the two companies. A successful acquisition can lead to increased revenue, profitability, and shareholder value. The other options listed do not provide a valid justification for acquiring a firm.

Which One of These Is the Best Justification for Acquiring