Conglomerate discount means:
I. The market value of the whole conglomerate is greater than the sum of the value of the parts
II. The market value of the whole conglomerate is less than the sum of the value of the parts
III. The book value of the whole conglomerate is greater than the sum of the value of the parts
IV. The book value of the whole conglomerate is less than the sum of the value of the parts
A) I only
B) II only
C) III only
D) IV only

Question

Quizplus · Accepted Answer

Conglomerate discount means that the market value of the whole conglomerate is less than the sum of the value of the parts. This discount is often attributed to the fact that conglomerates are usually valued at a discount due to their complexity and difficulty in analyzing their underlying businesses. Therefore, option B is the correct choice.

Conglomerate Discount Means: I. the Market Value of the Whole Conglomerate Is Greater