Several Studies Show That Incoming CEOs Have an Incentive to

question 9

Multiple Choice

Several studies show that incoming CEOs have an incentive to

• A)increase earnings in the year of the executive change as well as in years subsequent to the change.
• B)decrease earnings in the year of executive change and increase earnings in the next year.
• C)decrease earnings for a few years after taking over to establish a low "bonus baseline."
• D)take actions that will make his/her predecessor look incompetent thus validating the board's decision to change CEOs.

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