W17-2 Shirley Yu, president of SY Corporation, is concerned about several large stockholderswho have been very vocal lately in their criticisms of her leadership. She thinks they mightmount a campaign to have her removed as the corporation's CEO. She decides that buyingthem out by purchasing their shares could eliminate them as opponents, and she is confidentthey would accept a "good" offer. Yu knows the corporation's cash position is decent, so it hasthe cash to complete the transaction. She also knows the purchase of these shares willincrease earnings per share, which should make other investors quite happy. (Earnings pershare is calculated by dividing net income available for the common shareholders by theweighted-average number of shares outstanding. Therefore, if the number of sharesoutstanding is decreased by purchasing treasury shares, earnings per share increases.)Instructions:Answer the following questions.(a) Who are the stakeholders in this situation?(b) What are the ethical issues involved?(c) Should Yu authorize the transaction?

a) The stakeholders are those people who have a interest in the business. They can affect or get…

Answered: Answer the following questions. (a) Who…

Answer the following questions. (a) Who are the stakeholders in this situation? (b) What are the ethical issues involved? (c) Should Yu authorize the transaction?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 1MC

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