What Rationales for Unrelated Diversification Are Not Likely to Increase

question 96

Multiple Choice

What rationales for unrelated diversification are not likely to increase shareholder value?

• A) To reduce risk by spreading the company's investments over a set of truly diverse industries
• B) To enable a company to achieve rapid or continuous growth
• C) To chance that market downtrends in some of the company's businesses will be partially offset by cyclical upswings in its other businesses
• D) To provide benefits to managers such as high compensation and reduction in employment risk
• E) All of these

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Definitions:

Water Evaporation

The process by which water transforms from a liquid to a gas phase, often contributing to the Earth's hydrological cycle.

Nutrients

Substances obtained from food that are essential for growth, metabolism, and for the body to function properly.

Monosaccharides

The simplest form of carbohydrates, consisting of a single sugar molecule, such as glucose or fructose.

Phosphate Groups

Chemical groups containing phosphorus and oxygen that are critical components of molecules like DNA, ATP, and phospholipids.