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How Scandals Affect Value

If a financial institution is caught up in a financial scandal, would one expect its value to fall by more or less than the amount of any fines and settlement payments?

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The fall in value of the financial institution will be more than the amount of fines and settlement payments. If a financial institution is caught in a financial scandal it loses its reputation. Its main stakeholders lose confidence in the financial institution. The value would fall far greater than fines and settlement payments. Its customers and potential customers would not trust the financial institution, its best employees ...

Solution Summary

The solution weighs the loss of value resulting from a financial scandal against what the firm would pay in fines and settlements in 243 words with 2 references.