What rationales for unrelated diversification are not likely to increase shareholder value?
A) To reduce risk by spreading the company's investments over a set of truly diverse industries
B) To enable a company to achieve rapid or continuous growth
C) To chance that market downtrends in some of the company's businesses will be partially offset by cyclical upswings in its other businesses
D) To provide benefits to managers such as high compensation and reduction in employment risk
E) All of the above
Correct Answer:
Verified
Q21: A strategy of diversifying into unrelated businesses
A)
Q24: One strategic fit-based approach to related diversification
Q26: The two biggest drawbacks or disadvantages of
Q30: What makes related diversification an attractive strategy
Q32: A diversified company that leverages the strategic
Q52: A "cash hog" type of business
A) is
Q60: The success of unrelated diversification is dependent
Q68: A cash cow type of business
A)generates unusually
Q75: Checking a diversified firm's business portfolio for
Q94: The businesses in a diversified company's lineup
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