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12 March, 00:16

ESB Group is the parent company of many related businesses under its banner. Each share of the parent company is quoted at $220. However, if this had to be assessed by adding the stock prices of each of its strategic business units, the value would only be $200 per share. In this scenario, what has ESB Group created?

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  1. 12 March, 03:57
    0
    diversification premium

    Explanation:

    In this scenario, ESB Group has created diversification premium.
  2. 12 March, 04:04
    0
    Diversification Premium

    Explanation:

    Companies that pursue related diversification are more likely to improve their performance. They create a diversification premium: the stock price of related-diversification firms is valued at greater than the sum of their individual business
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