What does the expression "conglomerate discount" mean?
A)A firm's presence in different businesses allows a decrease in its total costs
B)Stock exchanges or bourses offered conglomerate shares at special-offer discounts
C)The stock market tends to value diversified companies at less than their break-up value
D)The stock market values moderately diversified companies at more than the sum of their parts

Question

Quizplus · Accepted Answer

Conglomerate discount refers to the phenomenon where the stock market undervalues a diversified company compared to the sum of its individual parts if they were traded separately. This is because investors may prefer to invest in more specialized companies rather than a conglomerate with diverse business segments.

What Does the Expression "Conglomerate Discount" Mean