The Basic Premise of Unrelated Diversification Is That

question 48

Multiple Choice

The basic premise of unrelated diversification is that

• A)the least risky way to diversify is to seek out businesses that are leaders in their respective industry.
• B)the best companies to acquire are those that offer the greatest economies of scope rather than the greatest economies of scale.
• C)the best way to build shareholder value is to acquire businesses with strong cross-business financial fit.
• D)any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.
• E)the task of building shareholder value is better served by seeking to stabilize earnings across the entire business cycle than by seeking to capture cross-business strategic fits.

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Definitions:

Indian Lands

Territories within the United States reserved for Native American tribes by the government, recognized as sovereign entities with certain levels of autonomy.

Virginia Planters

Wealthy landowners in colonial Virginia who dominated the social and political life of the region, primarily through their extensive cultivation of tobacco using enslaved labor.

Conflict

Involves a serious disagreement or argument, often a protracted one, which can occur between individuals, groups, or nations.

Chesapeake Families

Refers to the socio-economic structures and family systems predominant in the Chesapeake Bay region during the colonial and early American periods.