Companies that continue to act unethically (especially in the area of accounting) will most likely
A) have their shares appreciate in value because shareholders like aggressive accounting practices which help increase the price of their stock.
B) have their shares depreciate in value as shareholders become leery of aggressive accounting practices which distort a company's real financial condition.
C) never be able to sell shares of stock to the public.
D) find that their share price will be unaffected by this practice.
E) no pattern is evident.

Question

Quizplus · Accepted Answer

When a company acts unethically, especially in the area of accounting, it can lead to a loss of trust among investors and shareholders. This can result in a decline in the value of their shares as shareholders become wary of the company's financial reporting practices. Investors prefer transparency and honesty, and if they feel that a company is not being truthful in its financial statements, they may be less likely to invest in it or may sell their existing shares, causing the share price to decline. In summary, companies that act unethically are likely to have their shares depreciate in value.

Companies That Continue to Act Unethically (Especially in the Area