All of the following are internal firm incentives to diversify EXCEPT:
A) overall firm risk reduction.
B) uncertain future cash flows.
C) an abundance of firm resources.
D) low performance.

Question

Quizplus · Accepted Answer

An abundance of firm resources is not an internal firm incentive to diversify because having excess resources may lead the firm to focus on maximizing the returns on those resources, rather than seeking out new opportunities through diversification. The other options (overall firm risk reduction, uncertain future cash flows, and low performance) are all examples of internal firm incentives to diversify.

All of the Following Are Internal Firm Incentives to Diversify