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CH6_Sample Multiple ChoiceIdentify the choice that best completes the statement or answers the question. ____ 1. The lowest level of diversification is the ____ level.a. single businessb. dominant businessc. related constrainedd. unrelated ____ 2. The Publicis Groupe (Chapter 6 Strategic Focus) uses the digital

technology from its digital business to enhance the advertising products in itsadvertising group. This sharing of activities is characteristic of the _____________ diversification strategy.

a. related constrainedb. related linkedc. unrelatedd. dominant ____ 3. The purchasing of firms in the same industry is called:a. unrelated diversification.b. vertical integration.c. networking the organization.d. horizontal acquisition. ____ 4. Large diversified businesses often face what is known as the “conglomerate

discount.” This discount means that investorsa. understand that the financial efficiencies of this strategy automatically

make these stocks worth more than their current market valuation.b. believe that the value of conglomerates is less than the value of the sum

of their parts.c. increase the expected future earnings of conglomerates.d. have found that over time, conglomerates earn more than the component

companies would have earned independently. ____ 5. Managerial motives to seek diversification include a desire toa. improve their marketability to other firms.b. effectively use corporate resources.c. provide higher returns to corporate stakeholders.

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d. increase their compensation.