Out-Tel,a computer chip manufacturer,knowingly sold defective chips and failed to notify customers of the potential problems.When the problem became public knowledge,the firm's stock price fell dramatically.This illustrates the value that investors place on the ethical behavior of businesses.
The perception of unethical business practices will cause profit seeking,socially conscious investors to react to ethically unfavorable circumstances.

Question

Quizplus · Accepted Answer

The statement accurately reflects the impact of unethical behavior on investors and their perception of the company's value. When investors become aware of unethical behavior, they may change their investment strategies, leading to a decline in the company's stock price.

Out-Tel,a Computer Chip Manufacturer,knowingly Sold Defective Chips and Failed to Notify