Industrial diversifications .Are these justified
70% of diversification projects are brain child of rich and bored ceos who have got to break monotonous work life and appear more smart than their party friends। That is reason most of these fail or just languish। Diversification decision should be more justified than current business itself unless it is just to dump surplus cash generations with firm. such companies better reduce price for good of consumer and society and indirectly of themselves . I often feel amused looking at sense less diversifications or acquisitions without any concrete synergy or rise in earnings per share. more over I could never understand as to where year after year retained earnings go after paying just 10% of it to stock holders as dividends. Neither sales volume rise nor bonus shares nor increased dividends .