Question

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.

Answer 1

Answer:

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 ) .