Stock and Share Market Price

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If you were a manufacturer holding a substantial inventory of a product that has been outlawed in the United States, would you have any ethical concerns about selling the product in countries that do not prohibit its sale? Suppose the inventory write-down that you will be forced to take because of the regulatory obsolescence is material- nearly a 20 percent reduction in income will result. If you can sell the inventory in a foreign market, legally, there will be no write-down and no income reduction. A reduction of that magnitude would substantially lower share market price, which in i=turn would lead your large your large, institutional shareholders to demand explanations and possibly seek changes in your company’s board of directors. In short, the write-down would set off a wave of events that would change the structure and stability of your firm. Do you now feel justified in selling the product legally in another country? If you were a manufacturer holding a substantial inventory of a product that has been outlawed in the United States, would you have any ethical concerns about selling the product in countries that do not prohibit its sale? Suppose the inventory write-down that you will be forced to take because of the regulatory obsolescence is material- nearly a 20 percent reduction in income will result. If you can sell the inventory in a foreign market, legally, there will be no write-down and no income reduction. A reduction of that magnitude would substantially lower share market price, which in i=turn would lead your large your large, institutional shareholders to demand explanations and possibly seek changes in your company’s board of directors. In short, the write-down would set off a wave of events that would change the structure and stability of your firm. Do you now feel justified in selling the product legally in another country?
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