Managerial Economics 2nd Edition by William Boyes

Exercise 16

If investors are reluctant to invest in companies whose CEOs have unsavory reputations or companies that despoil the environment, but information about CEOs and about activities with regard to the environment are difficult for a typical investor to obtain, then we might expect (explain)a. the value of a company not to reflect the reputation of the CEO.
B) the price of a share of stock of the company not to rise or fall depending on who is CEO.
C) the value of a company not to decline when a company fails to devote resources to protecting the environment.
D) the price of a share of stock of a company not to fall if investors suspect a company is polluting the groundwater.
E) a company to begin offering such information to investors as a profit-seeking activity.