The Rising Ratio of Divestitures to New Acquisitions That Occurred

question 24

Multiple Choice

The rising ratio of divestitures to new acquisitions that occurred in the past suggests that

• A) poison pills are no longer effective as a defense against takeovers.
• B) too much diversification strained the operating capabilities of many firms.
• C) the portfolio effect has been a highly successful method of reducing risk.
• D) multinational firms are increasingly considered high risk investments.

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Definitions:

Nonprofit Organizations

Entities that operate primarily to serve public or social benefits, reinvesting excess revenues into their mission rather than distributing profits to shareholders or owners.

Managers

Individuals responsible for directing, controlling, and overseeing the operations and employees within an organization.

Double Bottom Line

An approach to business and social enterprise that emphasizes not just financial performance but also positive social impact.

Triple Bottom Line

A sustainability framework that evaluates a company's performance based on three factors: environmental, social, and financial.