Managers of Corporations Need to Act in an Ethical Manner

question 21

Multiple Choice

Managers of corporations need to act in an ethical manner

• A) because ethics violations will be punished by the law.
• B) because a business must be trusted by investors, customer and the public if it is to succeed.
• C) because business managers must answer to a higher authority.
• D) because ethical behavior is its own justification.

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Definitions:

Goodwill

An intangible asset representing the value of a business's brand, customer relationships, and intellectual property beyond tangible assets.

Chapter 11 Bankruptcy

Chapter 11 Bankruptcy is a legal process that allows businesses to reorganize their debts under the protection of the bankruptcy court, aiming to return to profitability while repaying creditors in an orderly fashion.

Reorganization Value

Reorganization Value is the estimated value of a company's assets during restructuring or bankruptcy proceedings, often used to assess the potential recovery for creditors and investors.

Unsecured Creditors

Creditors who have lent money without taking collateral, meaning they have no special claim on a debtor’s assets if the debtor fails to pay.