As a Strategy to Achieve Growth,diversification Is

question 4

Multiple Choice

As a strategy to achieve growth,diversification is:

• A)the most risky,because it ties up human capital that could be used elsewhere
• B)the most risky,because it requires developing both new products and new markets
• C)the most risky,because it is subject to more regulation
• D)the least risky,because if a new product fails,the new market may succeed,and vice versa
• E)the least risky,because if the management team researches the product and new market extensively,there is low likelihood of failure

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Definitions:

Cash Proceeds

The amount of money received from a transaction, often from the sale of assets or securities.

Expected Growth Rate

Represents the anticipated annual rate at which an investment, company, or economy will grow over a specified period.

Rate of Return

The gain or loss of an investment over a specific period, expressed as a percentage of the investment's initial cost.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash or stock.