The hubris hypothesis of takeovers is a term that describes: a. the overconfidence of leaders in their ability to create value by acquiring another company. b. a strategic plan for building a company through mergers and acquisitions. c. a commitment by managers to continue investing in a strategic plan even after they have received information that the project is failing. d. a manager deciding an acquisition is the right choice for a company because serendipity put the other firm in his or her path.

Question

Johnny Pittman

Social Studies

30 April, 13:10

The hubris hypothesis of takeovers is a term that describes: a. the overconfidence of leaders in their ability to create value by acquiring another company. b. a strategic plan for building a company through mergers and acquisitions. c. a commitment by managers to continue investing in a strategic plan even after they have received information that the project is failing. d. a manager deciding an acquisition is the right choice for a company because serendipity put the other firm in his or her path.

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Answers (1)

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Hugo Espinoza · Answer 1

a. the overconfidence of leaders in their ability to create value by acquiring another company.

Explanation:

The hubris hypothesis -

It means that the average rise in the target of the firm's market value, should always be more than the average reduction in the bidding firm's value, it is considered when there is no gain available to the corporate takeovers.

It is the leader's overconfidence for their ability to create value by acquiring any other company.

Hence, from the given information of the question the correct answer is (a).