Which of the following justifications for mergers is arguably for the benefit of management rather than stockholders?
A)Synergies
B)External growth
C)Diversification to reduce risk
D)Economies of scale
E)Guaranteed sources and markets

Question

Quizplus · Accepted Answer

Diversification to reduce risk is often more beneficial to management than to stockholders because it can make the company more stable and secure management's positions, even if it doesn't necessarily maximize shareholder value.

Which of the Following Justifications for Mergers Is Arguably for the Benefit