The value of the individual parts of a company if they were separate companies. Companies may consider a takeover if the split-up values of a target company's parts are higher than its purchase price. Likewise, a company may evaluate the split-up value of a department if it is considering a spin-off.
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The aggregate dollar value of a firm's various parts if they were to be sold separately. Many takeovers occur because of a difference between the stock market values and the split-up values of the target companies.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.