What are the consequences of diversification for corporate performance?
A)It rarely creates value
B)It nearly always destroys value
C)It may create or destroy value, depending largely on how sensible it is and how well it is executed
D)None of the above

Question

Quizplus · Accepted Answer

Diversification can create or destroy value depending on various factors like the industry in which the company operates, the synergies between businesses, and the ability of the company to manage different business segments effectively. Therefore, the best answer is option C - it may create or destroy value, depending largely on how sensible it is and how well it is executed. Options A and B are extreme and not always true. Option D is not the correct answer as diversification does have consequences on corporate performance.

What Are the Consequences of Diversification for Corporate Performance