To Create Value for Shareholders Via Diversification, a Company Must

question 35

Multiple Choice

To create value for shareholders via diversification, a company must

• A)get into new businesses that are profitable.
• B)diversify into industries that are growing rapidly.
• C)spread its business risk across various industries by only acquiring firms that are strong competitors in their respective industries.
• D)diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses.
• E)diversify into businesses that have either key success factors or value chains that are similar to its present businesses.

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Definitions:

Self-Referent Encoding

The process of relating new information to oneself, which enhances memory and recall of the information.

Semantic Encoding

The process of encoding information according to its meaning, allowing for deeper processing and better memory retention.

Deep Processing Encoding

A method of encoding information that involves meaningful analysis of the material, leading to better memory retention compared to shallow processing.

Dual-Code Encoding

A theory suggesting that information is stored in memory as both verbal descriptions and visual images.