Divestitures are commonly viewed as a favorable signal about a firm if the divested assets are unrelated to the firm's core business.

Question

Quizplus · Accepted Answer

Divesting unrelated assets can help a firm focus on its core business and improve its financial performance, which can be viewed favorably by investors and analysts. However, if a firm divests core assets, it may signal weaknesses or problems within the company.

Divestitures Are Commonly Viewed as a Favorable Signal About a Firm