The reduction of risk resulting from combining firms with differing seasonal or cyclical patterns ofsales or earnings is a key benefit of
A) vertical merger.
B) congeneric merger.
C) conglomerate merger.
D) horizontal merger.

Question

Quizplus · Accepted Answer

Conglomerate mergers involve the combination of firms in unrelated industries. This reduces the risk of the combined entity as the earnings of one company may offset the seasonal or cyclical fluctuations of the other.

The Reduction of Risk Resulting from Combining Firms with Differing