The rising ratio of divestitures to new acquisitions that occurred in the past suggests that
A) poison pills are no longer effective as a defense against takeovers.
B) too much diversification strained the operating capabilities of many firms.
C) the portfolio effect has been a highly successful method of reducing risk.
D) multinational firms are increasingly considered high risky investments.

Question

Quizplus · Accepted Answer

The rising ratio of divestitures to new acquisitions suggests that many firms have experienced difficulties managing overly diverse portfolios, leading them to shed non-core businesses and refocus on their core operations.

The Rising Ratio of Divestitures to New Acquisitions That Occurred