What is it called when a diversified company can add value by shifting capital from business units generating free cash flow to those needing additional capital to expand and realize their growth potential?

Question

Quizplus · Accepted Answer

This concept is known as an internal capital market, where a diversified company can allocate capital across its business units to optimize returns and drive growth. By reallocating capital from cash-generating units to those with growth potential, the company can make better use of its financial resources and enhance shareholder value.

What Is It Called When a Diversified Company Can Add