Which of the Following Statements About Corporate Diversification Is Incorrect

question 51

Multiple Choice

Which of the following statements about corporate diversification is incorrect?

• A)Creating added value for shareholders via diversification requires building a multibusiness company where the whole is greater than the sum of its parts.
• B)Diversification moves that satisfy all three diversification tests have the greatest potential to grow shareholder value over the long term.
• C)The more attractive an industry's prospects are for growth and good long-term profitability,the less expensive it can be to enter.
• D)Diversification cannot be considered a success unless it results in added shareholder value-value that shareholders cannot capture for themselves by spreading their investments across the stocks of companies in different industries.
• E)Shareholder value is not created by diversification unless it passes the "better off" or "1 + 1 = 3 test."

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Definitions:

Shorter Name

A simplified or abbreviated form of a name or identifier in programming, used for ease of reference and typing.

Synonym

In computing, it refers to a different name or alias for the same data object or function, often used in databases.

Typedef Struct Date

A way to define a new data type name for a structure, in this case specifically for representing dates.

Struct Date

A data structure used in programming to represent dates, typically including day, month, and year components.