What Does the Expression "Conglomerate Discount" Mean

question 3

Multiple Choice

What does the expression "conglomerate discount" mean?

• A)The ability of a widely diversified firm to exploit economies of scope to reduce its overall costs.
• B)The willingness of stock exchanges to offer discounted listing fees in order to attract highly diversified firms.
• C)The stock market tends to value diversified companies at less than their break-up value.
• D)The lower rates of return that highly diversified companies offer to their shareholders.

---

Definitions:

Whole-concept Processing

An approach in cognitive science suggesting people perceive and interpret complex information as complete wholes rather than breaking it down into component parts.

Code-based Processing

Involves deciphering information based on symbolic systems or codes, such as language or mathematics.

Information Processing Approach

describes a cognitive psychology theory that likens human thought processes to the operations of a computer, focusing on how information is taken in, processed, stored, and retrieved.

Empirically Tested

Refers to methods, theories, or measures that have been tested through empirical research, involving observation and experiment.