Sports Products, Inc.

Loren Seguara and Dale Johnson both work for Sports Products, Inc., a major producer of ride equipment and accessories. Loren works as a clerical assistant in the Accounting Department, and Dale works as a packager in the transportation Department. During their dejeuner break one day, they began talking about the company. Dale complained that he had always worked hard trying not to waste packing material materials and efficiently and cost-effectively performing his job. In spite of his efforts and those of his co-workers in the department, the wets stock price had declined nearly $2 per dowry over the past 9 months. Loren indicated that she shared Dales frustration, especially because the firms profits had been rising. Neither could understand why the firms stock price was falling as profits rose. Loren indicated that she had seen documents describing the firms profit sharing intent under which all managers were partially compensated on the rear of the firms profits. She suggested that perchance it was profit that was important to solicitude, because it this instant affected their pay. Dale said, That doesnt make sense, because the stockholders own the firm. Shouldnt management do whats best for stockholders? Somethings wrong!

Loren responded, Well, maybe that explains why the company hasnt concerned itself with the stock price. Look, the just profits that stockholders receive are in the form of property dividends, and this firm has never paid dividends during its 20-year history. We as stockholders therefore wear downt directly receipts from profits. The only way we benefit is for the stock price to rise. Dale chimed in, That probably explains why the firm is creation sued by state and federal environmental officials for dumping pollutants in the adjacent stream. Why spend money for pollution correspond? It increases costs, lowers profits, and therefore lowers managements earnings! Loren and Dale realized that the lunch break had ended and they must quickly return to work. Before... If you indigence to get a full essay, order it on our website: Ordercustompaper.com

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