Answer and Explanation:
Concentration on a single business could be inconsistent with stockholders wealth maximation when there is need for diversification or investment in other businesses for maximisation of shareholders returns. Concentration in one business brings the risk of going out of business as a result of products or services going obsolete, lack of expansion or higher level of competition and low market share. Therefore concentration in one single business is likely to tie down resources that could be used to diversify into other areas that may be profitable hence reducing shareholders wealth.
