Managing Linkages Among Businesses Through Transferring Skills and Sharing Resources

Multiple Choice

Managing linkages among businesses through transferring skills and sharing resources would appear to offer greater potential for creating value than portfolio management because:

A) Economies of scope have a greater impact on profitability than industry attractiveness
B) The size of acquisition premiums means that acquisitions typically destroy value for the acquirer
C) Increasingly efficient capital markets limit the potential either to acquire undervalued companies or to create value through internal capital allocation among businesses
D) Stock markets apply a conglomerate discount to highly diversified companies