The Better-Off Test for Evaluating Whether a Particular Diversification Move

question 100

Multiple Choice

The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves assessing whether the diversification move

• A)will make the company better off because it will produce a greater number of core competencies.
• B)will make the company better off by improving its balance sheet strength and credit rating.
• C)will make the company better off by spreading shareholder risks across a greater number of businesses and industries.
• D)offers potential for the company's existing businesses and new businesses to perform better together under a single corporate umbrella.
• E)will benefit shareholders due to gains in earnings per share and faster stock price appreciation.

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Definitions:

Keratins

are a family of fibrous structural proteins that are key components of hair, nails, and the outer layer of skin, as well as other epithelial tissues.

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Skin lesions that are very itchy and caused by a burrowing mite. Scabies is most commonly found between the fingers and on the genitalia.

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An illness caused by parasites, such as protozoa, worms, or insects, that live on or inside a host organism.