Managing linkages among businesses through transferring skills and sharing resources would appear to offer greater potential for creating value than portfolio management because:
A)Economies of scope have a greater impact on profitability than industry attractiveness
B)The size of acquisition premiums means that acquisitions typically destroy value for the acquirer
C)Increasingly efficient capital markets limit the potential either to acquire undervalued companies or to create value through internal capital allocation among businesses
D)Stock markets apply a conglomerate discount to highly diversified companies

Question

Quizplus · Accepted Answer

Efficient capital markets reduce the opportunity to acquire undervalued companies or create value through internal capital allocation, making managing linkages through skills and resources more valuable.

Managing Linkages Among Businesses Through Transferring Skills and Sharing Resources