A Firm Practicing Unrelated Diversification Can Make Better Capital Allocations

question 35

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 allocate capital according to more specific criteria than is possible with external market allocations.
• 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) corporate headquarters can more effectively discipline underperforming management teams through resource allocation than can the external market.

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Definitions:

Psychosexual Therapy

A form of therapy aimed at addressing psychological issues related to sexual function, desires, and identity, often involving discussions of sexual health and behavior.

Masters and Johnson

Pioneering researchers in the field of human sexuality, known for their work on the human sexual response cycle and sexual disorders.

Erection Myth

Misconceptions or false beliefs about erections, such as notions regarding size, endurance, and frequency that may not align with medical facts or individual variability.

Premature Ejaculation

A sexual dysfunction characterized by ejaculation that occurs with minimal sexual stimulation before, upon, or shortly after penetration, and before the person wishes it.