When should a business not be divested?
A)when the business is worth more to another company than to the parent company
B)when the business is a cash cow
C)when the business provides valuable strategic or resource fits for another company
D)when shareholders would be better served if the company sells the business for a generous premium
E)when the business lacks the cross-boundary presence of shared values and cultural compatibility

Question

Quizplus · Accepted Answer

A business should not be divested when it is a cash cow, meaning it generates consistent cash flow that the company can use to invest in other areas, support operations, or return value to shareholders. Divesting a cash cow could deprive the company of important financial resources.

When Should a Business Not Be Divested