The big issue an acquisition-minded firm must consider is whether strategically:
A. to acquire the firm at a price that is prohibitive—in other words, a price that cannot recapture the investment.
B. to require the acquired firm's resources and management capability to sustain the on-going struggling operation.
C. to pay a premium price for a successful local company or to buy a struggling firm at a discount price.
D. to pay a price that builds in all the synergistic advantages to the acquired firm.
E. to pay a very high premium price that sends a signal to the market that the new firm has arrived.
Answer: to pay a premium price for a successful local company or to buy a struggling firm at a discount price.