When Evaluating Strategic Fit Benefits That Related Diversification Can Deliver,one

question 81

Multiple Choice

When evaluating strategic fit benefits that related diversification can deliver,one must keep in consideration a number of factors.Which one is not relevant?

• A)Shareholder value stemming from a diversified business cannot be replicated by simply owning a diversified portfolio of stocks.
• B)The capture of cross-business strategic fits benefits is possible only through related diversification.
• C)Cross-business strategic fit benefits are not automatically realized;the benefits materialize only after management has successfully pursued internal actions to capture them.
• D)Shareholder value is created when the diversified company's profitability exceeds expectations.
• E)Related diversification is the process of holding the stock of many businesses in a portfolio.

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Definitions:

Land

In economics, land encompasses all natural resources used to produce goods and services, including not just agricultural land but also minerals, forests, and water.

Firm's Demand

The quantity of a product or service that a firm is willing and able to buy at various prices over a given period of time.

Substitution Effect

The change in consumption patterns due to a change in relative prices, causing consumers to substitute away from more expensive items towards cheaper ones.

Employment

Refers to the condition of having paid work or the relationship between an employer and an employee where the employee provides labor in exchange for compensation.