Which of the following is a value-reducing reason for diversification?
A) Enhancing the strategic competitiveness of the entire company
B) Expanding the business portfolio in order to diversify managerial employment risk
C) Gaining market power relative to competitors
D) Conforming to antitrust regulation

Question

Quizplus · Accepted Answer

Diversifying to reduce managerial employment risk can lead to decisions that prioritize management's job security over shareholder value, potentially reducing the overall value of the company.

Which of the Following Is a Value-Reducing Reason for Diversification