When the collective market value of a firm exceeds the independent market values of the firm's portfolio of business units, financial markets recognize the existence of a ________.
A) parenting advantage
B) separate firm advantage
C) parenting disadvantage
D) separate firm disadvantage

Question

Quizplus · Accepted Answer

When a firm's market value exceeds the sum of the market values of its business units, it is recognized as having a parenting advantage. This means that the firm's overall management is adding value beyond what each business unit could achieve independently.

When the Collective Market Value of a Firm Exceeds the Independent