Acquisition Is the Preferred Mode of Diversification for Most Firms

question 18

Multiple Choice

Acquisition is the preferred mode of diversification for most firms because:

• A)For companies with high price/earnings ratios,acquiring companies in other sectors that have low price/earnings ratios offers an attractive means of boosting market capitalization
• B)Empirical research shows that diversifying acquisitions typically create significant value for the acquiring firm
• C)The alternative of acquiring a minority stake does not give the diversifying firms significant decision-making influence over the target firm
• D)The alternative of setting up a new enterprise in the industry to be entered is slow and risky.

Recognize the role of altruism in human behavior and the factors influencing it.

Understand the biological and psychological factors contributing to aggression.

Comprehend the importance of interpersonal attraction and its influencing factors.

Understand the factors that contribute to aggression and methods to reduce it.

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Definitions:

Line Positions

Positions or roles within an organization that have direct responsibility for achieving the company's primary objective.

Managerial Accounting Report

A type of financial report that provides internal management with business operation insights for decision-making.

Dollar Savings

The amount of money saved as a result of spending less, typically measured in dollar terms.

Production Process

The sequence of operations that are involved in the transformation of raw materials into finished goods or services.