Evidence on stock prices finds that the sudden death of a chief executive officer causes stock prices to fall and the sudden death of an active founding chief executive officer causes stock price to rise. This contrary evidence happens because:

Question

Quizplus · Accepted Answer

The rise in stock prices following the death of an active founding CEO suggests that the market perceives the CEO's leadership as a negative factor for the firm's value, and their absence is seen as an opportunity for positive change.

Evidence on Stock Prices Finds That the Sudden Death of a Chief