Answer:
Option A is correct.
Explanation:
Though it might be seen initially that the CEO is not trying to increase the value of the shareholders wealth because the share price of the acquiring firm is falling down. This is half picture of the story. It is possible that this acquisition will bring value to the shareholders of the acquiring firm because the acquiring firm will add value to the firm acquired and the sales will grow drastically. As the story we are told is till interval so initially it is more relateable to principal agent problem. Principal agent problem is that agent (CEO) is not acting in the best interest (Wealth maximisation) of the principal (shareholders).
The CEO is not behaving unethically because there are doubts, CEO is pursuing profit maximization is totally wrong because we are not seeing short term profits and it is evident from the past that many parent companies added values to its subsiduaries.
When it comes to investing, the typical relationship between the risks and returns was that the greater the potential risk, the greater the investment return an investor will get. That is why investments are very risky, and an investor must be a risk-taker to attain such success.
Answer:
I would think that photography would be the answer but I am not 100% sure
Explanation:
A.
The cheese and crackers that are being consumed
by Carlos is not considered to be inferior goods because when there is a time
that his income may rise, he will likely consume other products aside from it.
B.
If the price of the cheese falls, what will
likely happen is that there will be a presence of substitution effect of where
the crackers will be fewer consumed and the cheese will be consumed more. When
there is a presence of income effect on the other hand, the cheese will be
consumed more as this will be considered as a good that is normal and the
crackers to be consumed fewer as this will be classified as an inferior good. The
likely outcome of it in both scenarios, Carlos will still consume fewer
crackers and the cheese to be more consumed.