Isidore Crocker, CEO of Gotham Engines, Is Strongly in Favor

question 48

Multiple Choice

Isidore Crocker, CEO of Gotham Engines, is strongly in favor of acquiring Carolina Textiles, a firm in an unrelated industry.Some members of the board of directors are questioning Crocker's motives for the acquisition.They argue that it is not uncommon for CEOs to push for acquisitions because:

• A) a successful acquisition will increase the CEO's power over the board of directors.
• B) making an acquisition is an easier route to increased firm value than is improving the firm's core competencies.
• C) higher CEO pay is related to larger organization size.
• D) CEOs nearing retirement seek to create empires to continue their legacy.

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Definitions:

Mental Incapacity

A condition where an individual is unable to understand or make rational decisions due to mental disability or disorder.

Unconscious

A state in which a person is not awake and not aware of and responding to their environment.

Legal Representative

An individual or organization officially appointed to act on another's behalf in legal matters or proceedings.

Market Value

The current price at which an asset or service can be bought or sold in an open and competitive marketplace.