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CS Professional · Corporate Restructuring, Valuation and Insolvency · Planning and Strategy

After acquiring a software firm, Nilgiri Tech Ltd finds that key engineers are resigning because of uncertainty about roles. Which step would most directly address the risk to the acquired value?

Clear communication of roles together with retention incentives for key talent is the most direct step. Resignations due to role uncertainty threaten the knowledge-based value acquired. Changing share capital, auditors or filing valuation reports does nothing to keep the engineers.

  1. AClear communication of roles and retention incentives for key talentCorrect
  2. BReducing the authorised share capital
  3. CChanging the statutory auditor of the target
  4. DFiling a fresh valuation report with the registrar

Explanation

Value in a software firm sits in its people. Clear role communication and retention incentives reduce attrition. Altering share capital, auditors or filing valuation reports does not address employee uncertainty.

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