Shareholders rests on a question of synergy

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Whether or not diversification is good for shareholders rests on a question of "synergy", or the whole being worth more than the sum of the parts. So the question should be,

Can one company that makes dirt bikes and on-road bikes give shareholders bigger long-term returns than what they could get for themselves by investing separately in two companies, one of which makes only dirt bikes and the other of which makes only on-road bikes?

Reference no: EM132910690

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