Diversifying into new businesses is justifiable only if it:

Question

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Diversifying into new businesses is justifiable if it results in building added long-term economic shareholder value by building a synergistic multibusiness company. This means that the new business should complement and enhance the existing businesses of the company, resulting in overall growth and profitability. Option A would only be justifiable if it results in increased profit margins and bigger total profits, but this may not always be the case with new businesses. Option C is not a valid reason for diversification as it does not address long-term growth and profitability, and is more focused on short-term benefits. Option D may be a benefit of diversification but is not the main justifiable reason. Option E is also not a valid reason for diversification as it does not address long-term growth and profitability.

Diversifying into New Businesses Is Justifiable Only If It