The "Conglomerate Discount" Occurs in Large, Highly Diversified Businesses and Results

question 41

True/False

The "conglomerate discount" occurs in large, highly diversified businesses and results from analysts not knowing how to value the vast array of large businesses with complex financial reports.

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Definitions:

Economic Efficiency

A condition in which all resources are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Consumer Surplus

The gap between the price consumers are prepared to pay for a good or service and the price they actually end up paying.

Consumer Surplus

The gap between what consumers are prepared to spend on a good or service and the actual amount they end up paying.

Consumer Surplus

The divergence in total intended consumer expenditure on a product or service and the total actual expenditure.