Which of the Following Is an Example of Rationalization

question 51

Multiple Choice

Which of the following is an example of rationalization?

• A) A ?rm diversi?es into unrelated markets, increasing its level of risk.
• B) A ?rm merges with another ?rm and reduces costs by combining managerial functions.
• C) One ?rm acquires another smaller ?rm although the managers at the smaller ?rm attempted to resist the takeover.
• D) A ?rm uses share-based equity ?nancing for mergers, instead of cash.

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Definitions:

Advertising Activities

Initiatives and efforts undertaken by a company to promote its products or services to a target audience.

Everyday Low Pricing

A pricing strategy where companies set a low price for their products on a consistent basis instead of relying on sales.

Acronym

A word formed from the initial letters of a phrase or series of words, often pronounced as a word itself.

EDLP

Stands for "Every Day Low Prices," a pricing strategy aimed at providing customers with consistently low prices without the need for sales or discounts.