Exam 7: Diversificationpart Threemarket and Competitive Analysis

Which of the following benefits of diversification explains the idea that a firm with many business lines can reduce swings in value because it receives only a small percentage of its revenue from any one of those business lines?

What type of research compares market valuations of diversified firms to those of undiversified firms to assess the success of diversification?

Which of the following sources of conglomerate value creation explains GE CEO Jeff Immelt's assertion that the businesses "fit together to grow consistently through the cycles"?

What force does Manne indicate constrains the actions of managers so that they stay focused on the goals of owners?

By satisfying which of the following conditions can shareholders prevent management driven acquisitions?

Which of the following sources of conglomerate value creation explains GE CEO Jeff Immelt's assertions that both GE's size allows it to "drive common initiatives across the company that accelerate growth,satisfy customers and expand margins" and GE's is able "develop people to grow a common culture that is adaptive,ethical and drives execution"?

Which of the following benefits of diversification explains the idea that a multiproduct firm is an efficient choice when the costs of doing business complicate inter-firm coordination?

What effect describes the notion that newly acquired plants see an average productivity increase of 3% while incumbent plants see an average productivity drop of 2%?

What type of research looks at the changes in market valuations in response to the announcement of diversifying acquisitions to assess the success of diversification?

What diversification benefit argument is countered with Lamont's study indicating that oil firm investments in their nonoil subsidiaries fell sharply after oil price drops in the 1980s?

Which Rumelt relatedness classification describes a firm that obtains between 70 and 95 percent of its annual revenues from a principal activity?

Which of the following benefits of diversification explains the idea that corporate diversification can provide situations where an acquiring firm determines the stock price for firm they intend to acquire is too low?

As is the case with most mergers what happened to target firm Gillette's stock and acquiring form P&G's stock on the day their merger was announced?

Which of the following is generally a way that LBOs can help a firm realize its potential value?

What institution within a firm must fail on some level for managers to be motivated to acquire another firm for the purposes of increasing their own compensation,shielding themselves against risk,or gaining prominence by running a larger firm?

Which of the following benefits of diversification explains the idea that combining unrelated businesses can allow firms to finance projects through cross-subsidization when they previously were unable to finance the same projects externally?

Which of the following is not a way managers generally benefit from acquisitions?

Which of the following is a term that can best be used to describe a broadly diversified firm?

Which of the following is not generally a potential benefit of diversification?

What measure,that depends on how much of a firm's revenues are attributable to product market activities that have shared technological characteristics,production characteristics,or distribution channels,is used to determine how diversified a firm is at a given time?