Which type of diversification is most likely to create value through financial economies?
A)related constrained
B)operational and corporate relatedness
C)unrelated
D)related linked

Question

Quizplus · Accepted Answer

Unrelated diversification involves entering into businesses that are unrelated to the firm's current line of business. This type of diversification can create value through financial economies because the firm can take advantage of financial synergies, such as tax savings, shared services, and economies of scale in financing activities. Related diversification, on the other hand, may involve operational or corporate relatedness, but it may not necessarily result in financial economies.

Which Type of Diversification Is Most Likely to Create Value