The Basic Premise of Unrelated Diversification Is That

question 48

Multiple Choice

The basic premise of unrelated diversification is that

• A)the least risky way to diversify is to seek out businesses that are leaders in their respective industry.
• B)the best companies to acquire are those that offer the greatest economies of scope rather than the greatest economies of scale.
• C)the best way to build shareholder value is to acquire businesses with strong cross-business financial fit.
• D)any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.
• E)the task of building shareholder value is better served by seeking to stabilize earnings across the entire business cycle than by seeking to capture cross-business strategic fits.

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Definitions:

Begs the Question

A logical fallacy where the argument's premise assumes the truth of the conclusion, instead of supporting it.

Popular Appeal

An appeal to popular opinion to gain support for our conclusion.

Famous Person

An individual who has gained widespread recognition and public attention.

Product Ad

A promotional message or material aimed at informing, persuading, or reminding consumers about a product.