Diversification Ought to Be Considered When

question 5

Multiple Choice

Diversification ought to be considered when

• A) a company's profits are being squeezed and it needs to increase its net profit margins and return on investment.
• B) a company lacks sustainable competitive advantage in its present business.
• C) a company begins to encounter diminishing growth prospects in its mainstay business.
• D) a company has run out of ways to achieve a distinctive competence in its present business.
• E) a company is under the gun to create a more attractive and cost-efficient value chain.

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Definitions:

Bond

A fixed income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental.

Sell

The act of giving or handing over something in exchange for money or other compensation.

Premium

An amount paid regularly to insure something or to cover the cost of a policy, also used to describe the amount paid over the nominal value of something.

Bonds

Long-term debt securities issued by corporations and government entities that pay interest to the holder.