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CIMA Exam CIMAPRA19-F03-1 Topic 7 Question 98 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 98
Topic #: 7
[All CIMAPRA19-F03-1 Questions]

A company is considering a divestment via either a management buyout (MBO) or sale to a private equity purchaser. Which of the following is an argument in favour of the MBO from the viewpoint of the original company?

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Suggested Answer: A

by Yong at Sep 15, 2024, 09:29 AM

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Ernestine
3 months ago
Haha, B is just a random buzzword thrown in there to distract us. Nice try, but I'm not falling for that one!
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Eliseo
3 months ago
Hmm, I'm going to have to go with A. Keeping the management team motivated and engaged is key after a divestment.
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Virgie
2 months ago
That's a good point. Maintaining a good relationship with the management team can definitely benefit the original company in the long run.
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Celestina
2 months ago
C) Improved relationships with management buyout team in the event of a sale to the private equity purchaser.
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Leila
3 months ago
A) Better co-operation post divestment.
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Camellia
3 months ago
C is just plain silly. Why would the original company care about their relationship with the MBO team if they're selling to a private equity firm?
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Kaycee
3 months ago
B is a bit out of left field. Big data has nothing to do with whether the company should choose an MBO or private equity sale.
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Shad
3 months ago
D seems like the best option to me. The synergistic benefits of the MBO should result in a higher price for the original company.
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Sheridan
2 months ago
Lai: It's important to consider all the potential benefits before making a decision.
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Lai
2 months ago
User 2: Definitely, higher price due to synergistic benefits is a strong argument in favor of the MBO.
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Stephaine
3 months ago
I agree, D does seem like the best option. The synergistic benefits could lead to a higher price.
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Tegan
4 months ago
But what about option A? Better co-operation post divestment could also be beneficial for the original company.
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Ivette
4 months ago
I think the correct answer is A. The management team will likely be more invested in the success of the company post-divestment if they've bought it out themselves.
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Rosio
2 months ago
That's true, maintaining good relationships can be beneficial in the long run.
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Thaddeus
2 months ago
C) Improved relationships with management buyout team in the event of a sale to the private equity purchaser.
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Remedios
3 months ago
I agree, the management team will have a vested interest in the company's success.
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Glendora
3 months ago
A) Better co-operation post divestment.
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Felicidad
4 months ago
I agree with Yuki, higher price due to synergistic benefits is definitely a key advantage.
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Yuki
4 months ago
I think option D is a strong argument for the MBO.
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