If a multinational firm paid too high a premium for the common stock of the company,this can lead to
A) divestiture.
B) expansion.
C) cost savings.
D) acquisition.

Question

Quizplus · Accepted Answer

Research shows that a majority of acquisitions of public corporations result in value destruction rather than value creation. Many large multinational firms have also failed to effectively integrate their acquisitions, paid too high a premium for the common stock of the company, or were unable to understand how the assets of the acquired firm would fit with their own lines of business.

If a Multinational Firm Paid Too High a Premium for the Common