Uncertainty about average profitability and the diversification discount

Autor:	Sheri Tice, John Hund, Donald Monk
Rok vydání:	2010
Předmět:	Economics and Econometrics ComputingMilieux_THECOMPUTINGPROFESSION Transparency (market) Strategy and Management Enterprise value Diversification (finance) Single segment Microeconomics Accounting Business cycle Economics Profitability index Volatility (finance) Finance Multiple
Zdroj:	Journal of Financial Economics. 96:463-484
ISSN:	0304-405X
DOI:	10.1016/j.jfineco.2010.02.006
Popis:	The diversification discount (multiple segment firm value below the value imputed using single segment firm multiples) is commonly thought to be generated by agency problems, a lack of transparency, or lackluster future prospects for diversified firms. If multiple segment firms have lower uncertainty about mean profitability than single segment firms, rational learning about mean profitability provides an alternative explanation for the diversification discount that does not rely on suboptimal managerial decisions or a poor firm outlook. Empirical tests which examine changes in firm value across the business cycle and idiosyncratic volatility are consistent with lower uncertainty about mean profitability for multiple segment firms.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::b36d5975ea9713506327dfd410d6465b https://doi.org/10.1016/j.jfineco.2010.02.006 Zobrazit plný text záznamu Full Text from ScienceDirect