Which of the Following Rationales for Pursuing Unrelated Diversification Is

question 7

Multiple Choice

Which of the following rationales for pursuing unrelated diversification is likely to increase shareholder value?

• A)Enabling a company to achieve rapid or continuous growth
• B)Reducing risk by way of spreading the company's investments over a set of truly diverse industries
• C)Stabilizing earnings,that is,market downtrends in some of the company's businesses will be partially offset by cyclical upswings in its other businesses
• D)Providing benefits to managers such as high compensation and reduction in employment risk
• E)Restructuring an underperforming business

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Definitions:

Catastrophic Thinking

The inclination to assume the worst case scenario or believe that negative events are much worse than they are in reality.

Should

Often used to express obligation, duty, or correctness, typically when criticizing someone's actions.

Constructive Coping

Positive strategies used by individuals to deal with stress and challenges effectively.

Emotion-Focused

A coping strategy that involves managing or regulating one's emotional response to a problem rather than addressing the problem directly.