A parent firm's decision to sell or to retain a subsidiary is often made by comparing the after-tax equity value of the subsidiary with the pre-tax and interest sale value of the business.

Question

Quizplus · Accepted Answer

The decision should compare the after-tax equity value of the subsidiary with the after-tax sale value, not pre-tax and interest sale value, to accurately assess the financial impact.

A Parent Firm's Decision to Sell or to Retain a Subsidiary