The basic premise of unrelated diversification is that
A. the best companies to acquire are those that offer the greatest economies of scope rather than the greatest economies of scale.
B. any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.
C. the task of building shareholder value is better served by seeking to stabilize earnings across the entire business cycle than by seeking to capture cross-business strategic fits.
D. the best way to build shareholder value is to acquire businesses with strong cross-business financial fit.
E. the least risky way to diversify is to seek out businesses that are leaders in their respective industry.
Answer: B
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