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:

Weak Analogy

A type of logical fallacy that occurs when an analogy is used to prove or support a conclusion, but the analogy is too dissimilar to be effective.

Motivational Problems

Issues or difficulties in finding the drive or desire to engage in or complete tasks, often impacting productivity and general mental health.

Lack of Motivation

A state where there is an absence of desire or willingness to take action or accomplish tasks.

Program Design

The process of planning and structuring the components and logic of a program or software to achieve specific goals.