When a Diversified Firm Concentrates on Its Core Businesses, the Market

Multiple Choice

When a diversified firm concentrates on its core businesses, the market typically values its stock higher. What could one infer from this?

A) Stockholders should sell their stocks
B) Diversified firms cannot be profitable
C) The market believes that those parts of the diversified firm sold off were being managed so badly they were reducing long term profit prospects
D) Growing economic turbulence has increased the cost of managing diversified firms