When a firm simultaneously practices operational relatedness and corporate relatedness:
A) it is difficult for investors to identify the value created by the firm.
B) the firm is likely to be overvalued by investors.
C) the firm will suffer from diseconomies of scope that outweigh the cost savings generated.
D) the firm is seeking to create value through financial economies.

Question

Quizplus · Accepted Answer

When a firm practices both operational and corporate relatedness, it can be challenging for investors to discern the specific sources of value creation, making it difficult to accurately assess the firm's value.

When a Firm Simultaneously Practices Operational Relatedness and Corporate Relatedness