Although the sale value may exceed the equity value of the business, the parent may choose to retain the business for strategic reasons.

Question

Quizplus · Accepted Answer

Sometimes, the parent company may decide to keep the business even when the sale value is higher than its equity value. This could be due to various strategic reasons such as maintaining control of a key business unit, avoiding layoffs or negative impact on brand image, or leveraging the business for synergies with other parts of the parent company.

Although the Sale Value May Exceed the Equity Value of the Business