Which of the Following Is NOT One of the Appeals

question 63

Multiple Choice

Which of the following is NOT one of the appeals of an unrelated diversification strategy?

• A) The ability to spread business risk over truly diverse industries (as compared to related diversification which is limited to spreading risk only among businesses with strategic fit).
• B) An ability to employ the company's financial resources to maximum advantage by investing in whatever industries/businesses offer the best profit prospects.
• C) The ability of superior top management to cope with the wide variety of problems encountered in managing a broadly diversified group of businesses.
• D) A potential for achieving somewhat more stable corporate sales and profits over the course of economic upswings and downswings (to the extent the company diversifies into businesses whose ups and downs tend to occur at different times).
• E) The potential to grow shareholder value by investing in bargain-priced or struggling companies with big upside profit potential,turning their operations around fairly quickly with infusions of cash and managerial know-how,and then riding the crest of higher profitability.

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Definitions:

Terms

Conditions and stipulations specified in an agreement or contract that outline the obligations, rights, and duties of the parties involved.

Offer

A proposal by one party to another regarding a potential contract, indicating a willingness to enter into an agreement under specified terms.

Mailbox Rule

A legal principle that considers a contract offer as accepted once the acceptance has been placed in the mailbox for return, even if it has not yet been received by the offeror.

Acceptance

In contract law, refers to the expression by the offeree to agree to the terms of an offer, resulting in a binding contract.