Which of the Following Reasons for Diversification Is MOST Likely

question 126

Multiple Choice

Which of the following reasons for diversification is MOST likely to increase the firm's value?

• A) Increasing managerial compensation
• B) Reducing costs through business restructuring
• C) Taking advantage of changes in tax laws
• D) Conforming to antitrust regulation

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Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Long-Term

Refers to assets, liabilities, or investments that are expected to be held or have an effect for a period exceeding one year.

Current

Pertaining to assets or liabilities expected to be consumed, sold, or settled within one fiscal year or the operating cycle, whichever is longer.

FASB

The Financial Accounting Standards Board, responsible for establishing and improving standards of financial accounting and reporting in the U.S.