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advantage of diversification

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › advantage of diversification

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by Ken Garrett.
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  • November 10, 2016 at 5:20 am #348277
    Vipin
    Member
    • Topics: 151
    • Replies: 374
    • ☆☆☆☆

    kaplan text says that the advantages of diversification

    increased flexibility
    better access to capital markets

    it actually lists 6 of them but I don’t understand the above 2 points.
    how it increases flexibility?
    how it enables better access to capital markets?

    thanks

    November 10, 2016 at 7:43 am #348290
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10595
    • ☆☆☆☆☆

    Not sure about flexibility – except that the company might have more products.

    Capital markets might view the risk in the group as being diversified so will reduce the cost of finance.

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