Which of the Following Benefits of Diversification Explains the Idea

question 15

Multiple Choice

Which of the following benefits of diversification explains the idea that mergers are more likely when there is an expectation of positive changes in market share?

• A)Use of internal capital markets
• B)Economies of scale and scope
• C)Economizing on transaction costs
• D)Diversifying shareholder portfolios
• E)Identifying undervalued firms

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Definitions:

Efficient Adaptation Strategies

Methods or approaches that effectively adjust to new conditions or environments with minimal waste of resources.

Global Warming

The long-term rise in the average temperature of the Earth’s climate system, largely attributed to human activities such as burning fossil fuels and deforestation.

Kyoto Treaty

An international agreement aimed at reducing carbon dioxide emissions and the presence of other greenhouse gases to combat global warming.

Industrial Pollution

The release of harmful substances into the environment as a result of manufacturing or processing activities.