The Better-Off Test for Evaluating Whether a Particular Diversification Move

question 32

Multiple Choice

The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves assessing whether the move will

• A)make the company better off because it will produce a greater number of core competencies.
• B)make the company better off by improving its balance sheet strength and credit rating.
• C)make the company better off by spreading shareholder risks across a greater number of businesses and industries.
• D)produce a synergistic outcome such that the company's different businesses perform better together than apart and the whole ends up being greater than the sum of the parts.
• E)help each business earn exactly what they were earning before coming under the same corporate umbrella.

---

Definitions:

Epicanthic Eye Fold

A skin fold of the upper eyelid that covers the inner corner of the eye, common among East and Southeast Asian populations and some other ethnic groups.

East Asian

Pertaining to the geographical region of East Asia, including countries such as China, Japan, South Korea, and others, known for its distinctive cultures, languages, and traditions.

Lactase Production

The biological process of producing lactase, an enzyme required for the digestion of lactose, the sugar found in milk.

Diabetes

A chronic condition characterized by high levels of sugar in the blood, resulting from the body’s inability to produce enough insulin or effectively use the insulin it produces.