Which of the following is not a way a corporation tries to create shareholder value in using portfolio strategy approaches?
A) Portfolio analysis provides a snapshot of the businesses in the portfolio of the corporation.
B) The expertise and analytical resources in the corporate office provide guidance in determining firm attractiveness for acquisition.
C) The corporate office is not able to provide financial resources to the business units on favorable terms.
D) The corporate office can provide high-quality review and coaching for the individual businesses.

Question

Quizplus · Accepted Answer

In using portfolio strategy approaches, a corporation tries to create shareholder value in a number of ways. First, portfolio analysis provides a snapshot of the businesses in the corporation portfolio. Therefore, the corporation is in a better position to allocate resources among the business units according to prescribed criteria (e.g., use cash flows from the cash cows to fund promising stars). Second, the expertise and analytical resources in the corporate office provide guidance in determining what firms may be attractive (or unattractive) acquisitions. Third, the corporate office is able to provide financial resources to the business units on favorable terms that reflect the overall ability of the corporation to raise funds. Fourth, the corporate office can provide high-quality review and coaching for the individual businesses. Fifth, portfolio analysis provides a basis for developing strategic goals and reward/evaluation systems for business managers.

Which of the Following Is Not a Way a Corporation