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Explain how Berger and Ofek (1995) empirically test the diversification effect on firm value. You need to explain how they estimate the imputed stand-alone value.

Explain how Berger and Ofek (1995) empirically test the diversification effect on firm value. You need to explain how they estimate the imputed stand-alone value. Point out what could be a potential problem using Berger and Ofeks imputed value measure.

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