What Rationales for Unrelated Diversification Are Not Likely to Increase

question 90

Multiple Choice

What rationales for unrelated diversification are not likely to increase shareholder value?

• A) In order to reduce risk by 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 reduction in employment risk.
• E) All of these.

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