A corporation that operates ethically will notice certain benefits as it applies to shareholder wealth maximization. With shareholder wealth maximization in mind, all of the following could be experienced by an ethical corporation EXCEPT _____.
A) reduced litigation expense
B) greater agency costs
C) reduced damages expenses
D) a more favorable impression by customers and investors

Question

Quizplus · Accepted Answer

Greater agency costs are not a benefit of operating ethically. Ethical behavior can lead to reduced litigation and damages expenses, as well as a more favorable impression by customers and investors. However, it may lead to higher agency costs in the short run as the company may need to invest in additional resources to ensure compliance with ethical standards.

A Corporation That Operates Ethically Will Notice Certain Benefits as It