GeoTransmit, a large multinational telecommunications company, hid from its investors the extensive debt and losses it had accumulated. Its fraudulent accounting behavior was eventually discovered, and the company went bankrupt. Which of the following statements is true of the future of GeoTransmit and its stakeholders?
A)The different stakeholders of GeoTransmit will be affected in different ways.
B)The decision of GeoTransmit to hide its losses from its investors will not have any impact on its market value.
C)The stakeholders of GeoTransmit will not be affected by its fraudulent practices.
D)The decision of GeoTransmit to hide its losses from its investors is considered to be ethical.

Question

Quizplus · Accepted Answer

The different stakeholders of GeoTransmit, such as employees, investors, creditors, and customers, will be affected in different ways by the bankruptcy of the company. Employees may lose their jobs, investors may lose their investments, creditors may not receive their payments, and customers may face disrupted services.

GeoTransmit, a Large Multinational Telecommunications Company, Hid from Its Investors