What does the expression "conglomerate discount" mean?
A)The ability of a widely diversified firm to exploit economies of scope to reduce its overall costs.
B)The willingness of stock exchanges to offer discounted listing fees in order to attract highly diversified firms.
C)The stock market tends to value diversified companies at less than their break-up value.
D)The lower rates of return that highly diversified companies offer to their shareholders.

Question

Quizplus · Accepted Answer

The "conglomerate discount" refers to the phenomenon where the stock market values a diversified company at less than the sum of its parts, or its break-up value.

What Does the Expression "Conglomerate Discount" Mean