Question: The better - off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves determining whether the proposed
The betteroff test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves determining whether the proposed diversification move
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provides the company with additional resource strengths.
provides additional ways to build the entrepreneurial skills of the company's senior managers.
spreads stockholders' risks across a greater number of lines of business.
has competitively valuable value chain matchups with the company's present businesses such that its businesses can perform better together than apart.
has good potential for increasing the company's rate of return on invested capital.
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