Which of the following is NOT a pro of Intergenerational Transfer?

Intergenerational transfer refers to the passing of ownership or control of a business from one generation to the next, typically within a family. Understanding the benefits associated with this type of transfer is essential to recognizing the factors that contribute positively to business succession.

The choice that indicates "Guaranteed higher sale price" is not a pro of intergenerational transfer because such a guarantee does not exist in practice. While family members may have an emotional commitment to maintaining the value of the family business, there are no assurances that the business will necessarily command a higher price simply because it's being transferred to the next generation. Market conditions, the performance of the business at the time of transfer, and various external factors will ultimately determine the sale price, regardless of familial ties.

On the other hand, the other options highlight realistic advantages of intergenerational transfers. For example, higher buyer/seller motivation reflects the intrinsic desire of family members to keep the business within the family, often leading to a more engaged and committed transition process. Lower costs are associated with fewer transaction fees or brokerage costs usually required in external sales. Similarly, less disruption indicates a smoother transition as family members are already familiar with the business operations, reducing the likelihood of operational interruptions during the transfer process.

These aspects