Which of the Following Rationales for Pursuing Unrelated Diversification Is

question 43

Multiple Choice

Which of the following rationales for pursuing unrelated diversification is likely to increase shareholder value?

• A) To reduce risk by way of spreading the company's investments over a set of truly diverse industries
• B) To enable a company to achieve rapid or continuous growth
• C) To chance that market downtrends in some of the company's businesses will be partially offset by cyclical upswings in its other businesses
• D) To provide benefits to managers such as high compensation and reduced unemployment risk
• E) To restructure an underperforming business

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