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Spending dollars from the sale on non-value

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Firm A is one of the largest airlines in the world and is based in Europe. Firm A sold all its struggling operations that operate in the United States to Airline B for a price much less than industry experts had expected.

Despite this lower than expected sales price, Firm A's stock price sharply increased. The primary explanation for the rise in the stock price was hinted at in the announcement.

Firm A indicated they would not rush on spending dollars from the sale on non-value adding projects but were considering share repurchases.

Answer the following:

What is your interpretation of this scenario?

Reference no: EM132589073

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