tbh i was just confused abut that question, i wasn't sure if the lower gearing in the other two companies will increase or decrease the holding company's overall gearing (surely it depends if they use debt, equity finance or reserves to buy the company) and if they did will it increase or reduce their gearing risk? the time i had left confused me enough that i couldn't think though a decision.
with ROCE/profitability, i just talked about how they might benefit form economies of scale, management of the holding company (because if i remember correctly the holding company's profitability was much better than both), which might in teh long run inc their profitability, i think i rambled on about other things too... but to be honest, not a nice question for me, i've never seen such in the past questions i did (2005-2011)
Last edited: Oct 12, 2012