Question : Case Study: PQR Enterprises - Funding Strategies for Diversification

PQR Enterprises is a well-established conglomerate planning to diversify its business operations. The company is evaluating various sources of business finance to support its diversification plans.

Questions : Business Finance and Diversification

In the context of business finance, what does "diversification" refer to?

Option 1: Increasing shareholder dividends
    

Option 2: Expanding to international markets
   

Option 3: Reducing company workforce

   

Option 4: Expanding into new business areas


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: Expanding into new business areas


Solution : The correct answer is (d) Expanding into new business areas

Diversification involves entering into new markets, launching new products or services, or expanding business operations into different areas or industries. The objective is to spread business risk by participating in various activities that may have different market dynamics, revenue streams, and growth potentials. This strategy helps the company balance its portfolio and reduce dependence on a single business line, potentially enhancing overall business sustainability and profitability.

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