The valuation of a target (from the parent's perspective) should increase when the potential acquirer's cost of capital increases.

Question

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The valuation of a target (from the parent's perspective) should decrease when the potential acquirer's cost of capital increases. This is because a higher cost of capital means the acquirer will require a higher rate of return on investment, making the target less valuable.

The Valuation of a Target (From the Parent's Perspective) Should