Question 4a
Answer

Possible benefits of disposing Tyche Co through a management buy-out may include:

Management buy-out costs may be less for Proteus Co compared with other forms of disposal such as selling the assets of the company or selling the company to a third party.

It may be the quickest method in raising funds for Proteus Co compared to the other methods.

There would be less resistance from the managers and employees, making the process smoother and easier to accomplish.

Proteus Co may retain a better relationship and beneficial links with Tyche Co and may be able to purchase or sell goods and services to it, as seems to have happened with the management service.

It may be able to get a better price for the company. The current management and employees possibly have the best knowledge of the company and are able to make it successful. Therefore they may be willing to pay more for it.

It may increase Proteus Co’s reputation among its internal stakeholders such as the management and employees. It may also increase its reputation with external stakeholders and the markets if it manages the disposal successfully and efficiently.

(Note: credit will be given for alternative relevant comments)