Which of the following statement (s) is/are NOT correct in the context of mergers?

One of the most crucial elements of an effective acquisition strategy is planning how one intends to finance the deal through an ideal capital structure. A high leveraged structure for acquisition is beneficial in the process of mergers and acquisitions. When a merger is planned, it is crucial to evaluate the composition of the boardroom and compatibility of the directors. Due diligence helps in detecting financial and business risks that the acquirer inherits from the target company.

A high leveraged structure for acquisition is beneficial in the process of mergers and acquisitions.

High leverage : One of the most crucial elements of an effective acquisition strategy is planning how one intends to finance the deal through an ideal capital structure. The acquirer may decide to acquire the target through cash. To pay the price of acquisition, the acquirer may borrow heavily from the market. This creates a very high leveraged structure and increases the interest burden of the company. This increased interest cost may consume a big portion of the earnings and defeat the very purpose of acquisition. Due diligence is a crucial component of the M&A process as it helps in detecting financial and business risks that the acquirer inherits from the target company. Inaccurate estimation of the related risk can result in failure of the merger. Boardroom split :When a merger is planned, it is crucial to evaluate the composition of the boardroom and compatibility of the directors. Managers or directors who are suddenly deprived of authority can be particularly bitter. Specific personality clashes between executives in the two companies are also very common. This may prove to be a major problem, slowing down or preventing integration of the entities.