When diversification combines two businesses in different industrial sectors,the key determinant of whether the diversification creates value is whether the diversification:
A)Changes the debt/equity ratio of the combined company.
B)Is between culturally-compatible businesses.
C)Causes management to lose its focus on its core business.
D)Enhances the competitive advantage of either or both of the two businesses.

Question

Quizplus · Accepted Answer

Diversification creates value when it enhances the competitive advantage of either or both businesses, leading to synergies and improved performance.

When Diversification Combines Two Businesses in Different Industrial Sectors,the Key