When a Diversified Firm Concentrates on Its Core Businesses, the Market

question 21

Multiple Choice

When a diversified firm concentrates on its core businesses, the market typically values its stock higher. What could one infer from this?

• A)Stockholders should sell their stocks
• B)Diversified firms cannot be profitable
• C)The market believes that those parts of the diversified firm sold off were being managed so badly they were reducing long term profit prospects
• D)Growing economic turbulence has increased the cost of managing diversified firms

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Definitions:

EEOC

The Equal Employment Opportunity Commission, a federal agency in the United States responsible for enforcing laws against workplace discrimination.

Authorities

Individuals or organizations that possess a specific power or control in a particular context, often within a hierarchy.

Previous Job

The last position of employment held by an individual before moving to their current role or seeking a new one.

Difficult Employee

An employee who presents challenges to management due to their attitude, behavior, or work habits.