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