To Create Value for Shareholders Via Diversification, a Company Must

question 35

Multiple Choice

To create value for shareholders via diversification, a company must

• A)get into new businesses that are profitable.
• B)diversify into industries that are growing rapidly.
• C)spread its business risk across various industries by only acquiring firms that are strong competitors in their respective industries.
• D)diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses.
• E)diversify into businesses that have either key success factors or value chains that are similar to its present businesses.

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Definitions:

FIFO

"First-In, First-Out," an inventory valuation method where the costs of the earliest items purchased or produced are the first to be expensed.

Cost Of Goods Available

The total cost of inventory that a company has available to sell at any given time, calculated by adding the beginning inventory to the cost of goods purchased or manufactured.

FOB Destination

Freight terms indicating that the seller places the goods free on board to the buyer’s place of business, and the seller pays the freight.

Physical Count

An inventory audit practice where a company manually counts all of its inventory at a certain point in time to verify stock levels and values.