A Firm Practicing Unrelated Diversification Can Make Better Capital Allocations

question 96

Multiple Choice

A firm practicing unrelated diversification can make better capital allocations to its subsidiary businesses than the external capital market can for all the following reasons EXCEPT

• A) corporate headquarters can change managerial incentives.
• B) corporate headquarters has more complete information about the subsidiary businesses than the external capital market.
• C) the firm can acquire other firms with innovative products instead of allocating capital to research and development.
• D) the firm can make strategic changes in its subsidiary businesses.

Identify factors that interfere with the effectiveness of the communication process.

Understand the importance of channel richness in communication and its capacity to carry information.

Know how feedback impacts the communication process and its role in reversing the communication flow.

Acknowledge the role of personal relationships and knowledge in building credibility.

---

Definitions:

Health Picture

A comprehensive overview or snapshot of an individual's current and potential health status.

Sleep People Need

Refers to the recommended amount of sleep individuals require each night to function optimally, varying by age and individual health needs.

Teenagers

Individuals in the stage of human life following childhood and preceding adulthood, typically ranging in age from 13 to 19 years.

Preschoolers

Children in the age group of approximately 3 to 5 years old, before they enter formal schooling, notable for rapid development in language, motor skills, and social interaction.