Which of the following firms is most prone to experiencing a diversification discount?
A) a company that deals in petroleum as well as natural gas
B) a company that derives its revenues from selling aerated drinks and health drinks
C) a company that pursues unrelated diversification
D) a company that pursues related-constrained diversification

Question

Quizplus · Accepted Answer

Firms that pursue unrelated diversification are often unable to create additional value. They experience a diversification discount in the stock market.

Which of the Following Firms Is Most Prone to Experiencing