When Diversification Combines Two Businesses in Different Industrial Sectors,the Most

question 26

Multiple Choice

When diversification combines two businesses in different industrial sectors,the most important determinant of whether the diversification is likely to create value is whether the diversification:

• A)Changes the debt/equity ratio of the combined company
• B)Is between businesses with similar values and management systems
• C)Causes management to lose its focus on its core business
• D)Offers opportunities for sharing resources and capabilities.