Diversification into Unrelated Businesses Can Add Value for Shareholders If

question 39

Multiple Choice

Diversification into unrelated businesses can add value for shareholders if:

• A) the brand is licensed to other users.
• B) retaining control of the economies of scope reduces transaction costs.
• C) the unrelated businesses have a high risk component.
• D) managers' pay is linked to the size of the firm and not profits.

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Definitions:

Lvalues

Expressions that refer to memory locations and thereby an object that occupies some identifiable location in memory (e.g., variables).

Rvalues

Expressions that refer to data values not associated with a persistent memory location.

Array

A data structure that stores a collection of items at contiguous memory locations where each item can be accessed by an index.

Implicit Conversion

Automatic transformation of a value from one data type to another by the compiler.