Assessing the Goals of Sports Products, Inc. Case Study Paper What should the management of Sports Products, Inc., pursue as its overriding goal? Why
What Management of Sports Products Inc pursue as its overriding goal is that current theory states that the firms’ appropriate objective is to increase investors assets. A firm’s stock cost reveals the possibility of the cash flow, timing and size that shareholders anticipate a firm to produce through the years. Financial administrators must just accept the measures that they suppose will raise the rate of the firm’s potential cash flow. Investors of a firm are at times called residual claimants. This means that they will only claim if one of the firm’s cash flows that stay after workers, providers and administrations are completely paid. Shareholders are at the end of the line. If the firm is unable to pay the stakeholders, the shareholders to do not gain anything. Shareholders allow for the most part the possibility of organizing the firm. Does the firm appear to have an agency problem? Explain
The firm does appear to have an agency problem because the firm’s stock price had declined nearly $2 per share over the past 9 months. The other problem in the agency is that the firm’s profits have been going up. In addition to the problem is that the shareholders receive are in the form of cash dividends and the firm has never paid cash dividends in its 20 year history. The other part of this problem is that the actions the managers are taking demonstrate that in case polluting controls demonstrate a profit increase which this means that they want to increase there salary instead of increasing the stock price. Evaluate the firm’s approach to pollution control. Does it seem to be ethical? Why might incurring the expense to control pollution be in the best interests of the firm’s owners despite its negative effect on profits? I believe that it is unethical because they know that doing those illegal things are against...
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