Which of the Following Is NOT an Erroneous Rationale for Unrelated

Multiple Choice

Which of the following is NOT an erroneous rationale for unrelated diversification?

A) risk reduction by spreading the company's investments over a set of diverse industries
B) expectations for rapid or continuous growth
C) stabilize earnings, i.e. market downtrends in some of the company's businesses will be partially offset by cyclical upswings in its other businesses
D) managerial motives including the prospects for higher compensation
E) growth by acquisition of an undervalued company at a bargain price can deliver enhanced shareholder value