A Software Firm Is Interested in Acquiring an App Development

Multiple Choice

A software firm is interested in acquiring an app development company that is small but highly profitable. The app developer also has a widely admired management structure and much lower attrition rates than are common in the industry. Which of these problems should the software firm anticipate?

A) A rival software firm may imitate this approach by acquiring a similar app developer.
B) The software firm may overpay for the app developer, poorly serving the software firm's shareholders.
C) Because most acquisitions are profitable, there is little to worry about in this scenario.
D) The software firm may underpay for the app developer, cheating the app developer's shareholders of profit.