One Advantage of an Unrelated Diversification Strategy in a Developed

question 52

True/False

One advantage of an unrelated diversification strategy in a developed economy is that competitors cannot easily imitate the financial economies, whereas they can easily replicate the value gained through the use of a related diversification strategy.

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Definitions:

Carrying Value

The book value of assets and liabilities on a company's balance sheet, reflecting the historical cost of assets minus accumulated depreciation.

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares at certain times during its life, usually at the discretion of the bondholder.

Carrying Value

The book value of an asset or liability on a company's balance sheet, calculated as the original cost minus accumulated depreciation or amortization.

Common Stock

Represents a type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.