The Three Tests for Judging Whether a Particular Diversification Move

question 54

Multiple Choice

The three tests for judging whether a particular diversification move can create value for shareholders are the

• A)attractiveness test, the profitability test, and the shareholder value test.
• B)strategic fit test, the competitive advantage test, and the return-on-investment test.
• C)resource fit test, the profitability test, and the shareholder value test.
• D)attractiveness test, the cost of entry test, and the better-off test.
• E)shareholder value test, the cost of entry test, and the profitability test.

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Definitions:

Family Life Cycle

A series of stages through which a family goes over time, including changes in family composition, finances, and needs.

Purchasing Behaviors

The manner in which consumers buy products or services, including their research, selection, and buying patterns.

Formation

The process of establishing or structuring a new business entity, social group, or other organized body.

Information Gatherer

An individual or tool that collects data or information from various sources for analysis, decision-making, or dissemination purposes.