With an Unrelated Diversification Strategy,the Types of Companies That Make

question 85

Multiple Choice

With an unrelated diversification strategy,the types of companies that make particularly attractive acquisition targets are

• A) financially distressed companies with good turnaround potential,undervalued companies that can be acquired at a bargain price,and companies that have bright growth prospects but are short on investment capital.
• B) companies offering the biggest potential to reduce labor costs.
• C) cash cow businesses with excellent financial fit.
• D) companies that are market leaders in their respective industries.
• E) companies that are employing the same basic type of competitive strategy as the parent corporation's existing businesses.

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Definitions:

Negatively Sloped

A term used in economics to describe a line on a graph that moves downwards from left to right, indicating an inverse relationship between two variables.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from trading a good or service.

Consumer Surplus

The difference between the total amount consumers are willing to pay for a good or service versus the total amount they actually pay.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total benefit to society from the production and consumption of goods or services.