Which Company Experienced a Tarnished Reputation and Scandal After Experiencing

question 74

Multiple Choice

Which company experienced a tarnished reputation and scandal after experiencing behavior substitution when employees altered their behavior on the job to fit the reward system?

• A) Sears
• B) J.C. Penney
• C) Neiman Marcus
• D) Saks
• E) Macy's

---

Definitions:

Abnormal Earnings

Profits that exceed or fall short of the expected normal return for a given year or period.

Cutting Costs

Refers to actions implemented by a business to reduce expenses and improve profitability.

Abnormal Earnings Approach

A method for valuing a company's worth based on the premise that stock prices are influenced by differences between the expected and actual earnings, adjusted for the cost of capital.

Equity Valuation

The process of determining the fair market value of a company's equity or shares.