According to the chapter case discussing mergers and acquisitions, what is the most predominant cause for the fact that 60 percent of M&As result in falling stock value for the acquiring company?
a. The acquiring firm underestimates the risks in merging IT infrastructures.
b. Target companies often have outdated information systems or have stopped spending on IT investments.
c. Target companies rarely have IT systems that are compatible with the acquiring firm.
d. Acquiring firms tend to build entirely new information systems rather than inventorying all existing systems and choosing to keep only those with proven value.
Answer: A
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