The basic premise of unrelated diversification is that
A) the least risky way to diversify is to seek out businesses that are leaders in their respective industry.
B) the best companies to acquire are those that offer the greatest economies of scope rather than the greatest economies of scale.
C) the best way to build shareholder value is to acquire businesses with strong cross-business financial fit.
D) any company that can be acquired on good financial terms and has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.
E) the task of building shareholder value is better served by seeking to stabilize earnings across the entire business cycle than by seeking to capture cross-business strategic fits.
Correct Answer:
Verified
Q21: A diversified company that leverages the strategic
Q22: One of the suggested advantages of an
Q23: Opportunities for cross-business strategic fit exist
A)in R&D
Q24: One strategic fit-based approach to related diversification
Q25: Which of the following is an important
Q28: The greatest dilemma that an acquisition-minded firm
Q29: The types of companies that make particularly
Q30: Cross-business strategic fits are unlikely to be
Q31: What makes related diversification an attractive strategy
Q39: The essential requirement for different businesses to
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