Which of the Following Benefits of Diversification Explains the Idea

question 29

Multiple Choice

Which of the following benefits of diversification explains the idea that combining unrelated businesses can allow firms to finance projects through cross-subsidization when they previously were unable to finance the same projects externally?

• 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:

Niche Marketing

A targeting strategy that involves pursuing a large share of a small market segment.

Print Advertising

A form of advertising that uses physically printed media, such as newspapers and magazines, to reach consumers and promote products or services.

International Markets

Markets that exist outside of a company's home country, allowing for the expansion and sale of goods and services globally.

Global

Relating to or encompassing the whole world; involving or affecting the entirety of the Earth.