The Tests of Whether a Diversified Company's Businesses Exhibit Resource

Multiple Choice

The tests of whether a diversified company's businesses exhibit resource fit do not include

A) whether a business adequately contributes to achieving the corporate parent's performance targets.
B) whether the excess cash flows generated by cash cow businesses are sufficient to cover the negative cash flows of its cash hog businesses.
C) whether the corporate parent has or can develop sufficient resource strengths and competitive capabilities to be successful in each of the businesses it has diversified into.
D) whether the company has adequate financial strength to fund its different businesses and maintain a healthy credit rating.
E) whether the corporate parent has sufficient cash to fund the needs of its individual businesses and pay dividends to shareholders without having to borrow money.