When a Diversified Firm Combines Unrelated Businesses

question 34

Multiple Choice

When a diversified firm combines unrelated businesses:

• A)Research suggests there is an absence of shareholder's benefits
• B)Research indicates there is a shareholder's benefit
• C)Research is inconclusive about benefits to shareholders
• D)Empirical research is required in advance

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Definitions:

AASB 6

Refers to the Australian Accounting Standards Board standard that deals with the exploration for and evaluation of mineral resources.

AASB 6

Exploration for and Evaluation of Mineral Resources, an Australian standard that governs the financial reporting of exploration and evaluation expenditures in the mining sector.

Exploration Phase

The period in the development of a mining, oil, or gas project focused on discovering and determining the size and quality of a mineral or hydrocarbon deposit.

Development Phase

A stage in the business cycle or project where new products, ideas, or projects are being developed, prior to commercial production or sale.