Many companies use split-offs as a means to unlock shareholder value. The split-off effectively splits the company
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Many companies use split-offs as a means to unlock shareholder value. The split-off effectively splits the company into two pieces, each of which can then be valued separately by the stock market. If managers are compensated based on reported profit, how might they strategically structure the splitoff? What corporate governance issues does this present?
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Answer If managers are compensated based on reported profit they may strategically structure the splitoff in a way that enhances profitability for the portion of the company they will continue to mana...View the full answer
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Related Book For
Financial And Managerial Accounting For MBAs
ISBN: 9781618533593
6th Edition
Authors: Peter D. Easton
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