How can a firm pursuing a diversification strategy enhance its overall corporate performance by leveraging financial economies?
A) by using internal capital markets as a source of value creation
B) by adding more unrelated businesses into its corporate portfolio
C) by increasing its coordination and influence costs
D) by investing in businesses under the question mark quadrant of the BCG matrix

Question

Quizplus · Accepted Answer

Internal capital markets can be a source of value creation in a diversification strategy if the conglomerate's headquarters does a more efficient job of allocating capital through its budgeting process than what could be achieved in external capital markets.

How Can a Firm Pursuing a Diversification Strategy Enhance Its