Porter Maintains That the Potential for Corporate Value Creation Increases

question 77

Multiple Choice

Porter maintains that the potential for corporate value creation increases as a group's divisional activities become more integrated. The problem is:

• A)Porter has no experience running real companies
• B)No company can keep a promise to always increase its divisional synergies
• C)The idea of corporate value creation is practically useless, because it cannot be measured
• D)There is a big difference between potential and achievement.

---

Definitions:

Equally-Weighted Portfolio

An investment strategy where each asset in a portfolio is allocated the same percentage of total investment capital.

Economic Growth

The increase in the production of goods and services in an economy over a period of time, typically measured as the annual rate of increase in real GDP.

Portfolio Return

The overall gain or loss experienced by an investment portfolio over a specified period.

Stock Returns

The gain or loss made on an investment in shares, generally represented as a percentage of the investment’s initial cost.