Which of the Following Rationales for Pursuing Unrelated Diversification Is

question 117

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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Definitions:

Lymphatic System

A subsystem of the cardiovascular system; returns excess interstitial fluid (lymph) to the circulation; defends the body against disease organisms.

Interstitial Fluid

The fluid that surrounds the cells in tissues and is exchanged with the blood, providing nutrients and removing waste materials.

Pacemaker

A device implanted in the chest to regulate the heartbeat.

Atrioventricular Node

A part of the cardiac conduction system that coordinates the top heart chambers (atria) contraction with the bottom chambers (ventricles) ensuring a synchronized heartbeat.