External incentives to diversify include:
A) the fact that other firms in an industry are diversifying.
B) pressure from stockholders who are demanding that the firm diversify.
C) the government's antitrust regulations and tax laws.
D) a firm's low performance.

Question

Quizplus · Accepted Answer

Government's antitrust regulations and tax laws can serve as external incentives for firms to diversify, as they may encourage diversification to avoid regulatory issues or to take advantage of tax benefits.

External Incentives to Diversify Include