What question did this study set out to answer?

The aim is to respond to critiques regarding diversification metrics at the company level and their relevance for management decisions.

Covariability of Segment Earnings and Multisegment Company Returns: A Reply.

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This reply addresses comments on company-level diversification measures, impacting capital budgeting decisions.

The aim is to respond to critiques regarding diversification metrics at the company level and their relevance for management decisions.
Analysis of previous comments on diversification efficacy
Discussion of ex ante measures of diversification success
Evaluation of implications for capital budgeting practices
Affirms the relevance of proposed diversification measures
Highlights potential impacts on investment project selection
Clarifies misunderstandings from previous discussions

William R. Kinney (1974) studied this question.

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