Which of the Following Is Not an Example of When

question 26

Multiple Choice

Which of the following is not an example of when an organization should use an unrelated diversification strategy?

• A) When revenues derived from an organization's current products or services would increase significantly by adding the new unrelated, products.
• B) When an organization's present channels of distribution can be used to market the new products to current customers.
• C) When the new products have counter-cyclical sales patterns compared to an organization's present products.
• D) When an organization competes in a highly competitive and/or a no-growth industry.
• E) When the organization has a strong management team

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Definitions:

Red Herring

A preliminary prospectus filed by a company with the SEC, usually in connection with an initial public offering (IPO), that is subject to amendment.

Rights Offerings

An offer made by a company to its shareholders to purchase additional shares directly from the company at a specified price and within a specific time period.

Pure Rights Offerings

A method of raising capital in which a company offers existing shareholders the right to purchase additional shares directly, usually at a discount.

Price Drop

A decrease in the price of a commodity, security, or other financial instrument, often reflecting changes in demand and supply.