Question: The failure of managers to release bad news is a

The failure of managers to release bad news is a version of the adverse selection problem. Such failure indicates that the securities market is not working well.

Required
a. Why might a manager withhold bad news?
b. When will the disclosure principle operate to motivate the manager to report bad news? Under what conditions is the disclosure principle subject to failure?



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  • CreatedSeptember 09, 2014
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