Which of the following is an example of rationalization?
A) A ?rm diversi?es into unrelated markets, increasing its level of risk.
B) A ?rm merges with another ?rm and reduces costs by combining managerial functions.
C) One ?rm acquires another smaller ?rm although the managers at the smaller ?rm attempted to resist the takeover.
D) A ?rm uses share-based equity ?nancing for mergers, instead of cash.

Question

Quizplus · Accepted Answer

Rationalization often involves streamlining operations to increase efficiency and reduce costs, which is exemplified by a firm merging with another and reducing costs by combining managerial functions.

Which of the Following Is an Example of Rationalization