Porter's "three essential tests" help to determine:
A)The likely impact of diversification upon risk
B)The potential for diversification to create shareholder value through boosting profitability
C)The impact of diversification on stakeholders
D)How the financial markets would react to a diversification.

Question

Quizplus · Accepted Answer

Porter's "three essential tests" are designed to assess whether diversification can create shareholder value by enhancing a company's profitability. These tests evaluate the attractiveness of the industry, the cost of entry, and the potential for synergy with the company's existing business units.

Porter's "Three Essential Tests" Help to Determine