With calls for President-Elect Donald Trump to divest himself from his businesses, you might wonder: What ought business owners do when they find themselves in a position of government power that poses direct conflicts of interest between the advancement of the public good and personal enrichment?
Some critics have suggested that President-Elect Trump ought to liquidate the entirety of his business holdings, with any hardship imposed by this recommendation amounting to a trivial sacrifice in exchange for the highest office in the land.
The “hardship” imposed by mandatory selling is two-fold.
First, there is the possibility that you will receive lower than fair market prices because prospective buyers are aware of the forced sale. As a reference point, the P/E ratio at the time of sale for divestitures arising from antitrust mandates are 17% lower than merger activity that lacks such coercion. Forced liquidation of assets might mean that, say, … Read the rest of this article!