In Complete Voluntary Liquidations, the Sum of the Firm's Parts

question 4

Multiple Choice

In complete voluntary liquidations, the sum of the firm's parts is worth more than the whole, for all of the following reasons EXCEPT:

• A)the assets (or divisions) may be worth more in the hands of more competent managers.
• B)liquidated assets always sell at a premium to their fair value.
• C)the special tax treatment afforded liquidations provides a source of value over and above the firm's value as a going concern.
• D)any diseconomies associated with excessive diversification can be eliminated by piecemeal sale through liquidation.

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Definitions:

Dangerous

Involving potential harm or risk to safety, security, or health.

Retribution

A principle of justice that suggests punishment should be proportionate to the crime committed as a form of moral vengeance.

Criminal Punishment

The legal process by which an individual who has been found guilty of a crime is subjected to a penalty imposed under the law.

Sex Offenses

Crimes that involve illegal or coerced sexual conduct against another individual.