Which of the Following Is True of Related Diversification

question 23

Multiple Choice

Which of the following is true of related diversification?

• A)The motivations for related diversification are primarily financial rather than operational.
• B)Related diversification contributes to internal synergy through the sharing of production facilities and marketing and distribution skills.
• C)Related diversification occurs when a disproportionate number of a firm's current businesses face decline because of decreasing demand.
• D)Related diversification is typically the riskiest growth strategy in terms of financial outcomes.

Comprehend the significance of business valuation methods, including the review of industry sales.

Appreciate the role of informal networks in finding business opportunities.

Recognize the importance of combining tangible and intangible assets in determining a business's price offer.

Understand the importance of transparent motivations in the sale and purchase of businesses.

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Definitions:

Manufacturer

An entity or business that produces goods on a large scale using machinery, labor, and raw materials.

Agent

A person or entity authorized to act on behalf of another, often in business dealings or negotiations.

Legal Authority

The lawful right given to an individual or body to make decisions, to command, or to judge matters according to law.

Manufacturer

A company or individual that makes goods for sale, typically involving large-scale production using machinery.