For a short time frame, all units suffer -8 to morale when the army general is killed. This penalty then drops to -2 for the rest of the battle. Any vicinity morale bonuses from the general's rank are lost (+1 for all units per 2 stars, +1 per star when within 50 meters).
I don't believe there is any difference within the battle. The King will always be the general is present however, regardless of rank.
Units lose the vicinity morale bonus the general gives, plus the attack/defense bonuses.
, especially the King.
Not sure what you mean by this. I think the vicinity morale bonus will still apply until the general exits the map. I don't think his army suffers the -8/-2 morale penalty if he flees off the map though, and the attack/defense bonus also stays, so it is better to kill/capture.
This will depend on the skill of his "second in command". Taking out a high rank general is always nice, it's even better when the next highest in the stack only has 2 stars...
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