Question $15,1\mathrm{.}2-8$

HW Score: $85\mathrm{.}94\%,13\mathrm{.}75$ of $16$ points

Points: $0$ of $1$

There is a tendency for CEOs of larger companies to earn more money than CEOs of smaller companies. Suppose a CEO decides to acquire another company, thus increasing the size of the CEO's firm. Suppose also that the price of the stock of the acquiring firm falls when investors learns of the upcoming acquisition. This appears to be an example of $q,$

A$.$ a CEO behaving unethically

B$.$ the principal $-$ agent problem

C$.$ the general principal that acquisitions are generally not good investments

D$.$ a CEO pursuing profit maximization rather than wealth maximization