According to which hypothesis below, the market generally reacts favorably to an asset sale because such sales promote efficiency by allocating assets to better uses.
A)the financing hypothesis of asset sales
B)the efficient deployment hypothesis
C)the information hypothesis
D)the fire-sales hypothesis

Question

Quizplus · Accepted Answer

The efficient deployment hypothesis suggests that the market reacts favorably to an asset sale because it believes the sale will lead to a more efficient allocation of resources. This hypothesis posits that assets are transferred to entities that can utilize them more effectively, thereby enhancing overall economic efficiency.

According to Which Hypothesis Below, the Market Generally Reacts Favorably