a) Reasons

0.0(0)
Studied by 0 people
linked notesNote
call kaiCall Kai
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
GameKnowt Play
Card Sorting

1/4

encourage image

There's no tags or description

Looks like no tags are added yet.

5 Terms

1
New cards

  • define demerge


  • when a firm

  • sells one of its businesses

  • or

  • splits into multiple firms


2
New cards

  • state the reasons firms often demerge


  • profitability

  • management

  • risk mitigation


3
New cards

  • explain how profitability justifies a demerger


  • prevents diseconomies of scale

  • more perceptive to market changes


4
New cards

  • explain how efficient management justifies a demerger


  • streamlined focus

  • less bureaucracy


5
New cards

  • explain how risk mitigation justifies a demerger


  • removes loss making firms/early and high-debt projects

  • prevents transitional instability