Which of the Following Is NOT a Valid Reason for a Company

question 38

Multiple Choice

Which of the following is NOT a valid reason for a company to seek external growth through mergers?

• A)to avoid paying dividends
• B)to achieve greater diversification
• C)to take advantage of the tax-loss carryforwards
• D)to maintain availability of raw materials

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Definitions:

Economically Inefficient

A condition where resources are not utilized in the best possible manner, leading to potential waste or losses in terms of welfare or output.

Average Total Cost

The total cost of production divided by the total quantity produced, representing the per-unit cost of production.

Marginal Cost

Refers to the increase in total production costs resulting from the production of one additional unit of a good or service.

Single-Price

A pricing strategy where a product is sold at the same price to all customers under similar conditions.