What is it called when a diversified company can add value by shifting capital from business units generating free cash flow to those needing additional capital to expand and realize their growth potential?
A) internal capital market
B) cash cow benefits
C) economic value added
D) shareholder value added
E) derived valuation

Question

Quizplus · Accepted Answer

This concept is known as internal capital market, where a diversified company can allocate capital internally to optimize overall performance and value creation. This allows for efficient use of resources and helps businesses with growth potential to expand while also benefiting from the stable cash flow generated by other business units.

What Is It Called When a Diversified Company Can Add