In Deciding to Sell a Business,a Parent Firm Should Compare

question 113

True/False

In deciding to sell a business,a parent firm should compare the business' after-tax value in sale with its pre-tax value to the parent as part of the parent.

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Definitions:

Parent Company

A corporation that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.

Forward Trade

A tailor-made agreement for buying or selling an asset at a future moment, based on a price established in the present, and not conforming to standard regulations.

Currencies

Systems of money in general use in particular countries or regions, facilitating trade and economic activities.

Exchange Rate

The value of one currency for the purpose of conversion to another, which determines how much one currency is worth in terms of another.