Large diversified businesses often face a _______________, which results from analysts not knowing how to value a vast array of large businesses with complex financial reports.
A) threat of regulation by the Securities and Exchange Commission
B) high CEO turnover
C) threat of takeover
D) conglomerate discount

Question

Quizplus · Accepted Answer

Large diversified businesses often face a conglomerate discount, which occurs when the market values the diversified company at less than the sum of its parts. This is because analysts and investors struggle to understand and value the complex financial reports of a variety of businesses within the conglomerate, leading to a lower valuation.

Large Diversified Businesses Often Face a _______________, Which Results from Analysts