(c) Listing a large firm's stock is often considered to be beneficial to stockholders because the increases in liquidity and reputation probably outweigh the additional costs to the firm. (d) Stockholders have the right to elect the firm's directors, who in turn select the officers who manage the business. If stockholders are dissatisfied with management's performance, an outside group may ask the stockholders to vote for it in an effort to take control of the business. This action is called a tender offer. (e) The announcement of a large issue of new stock could cause the stock price to fall.
If the officials who are to keep the corporations in check are run by the giant companies themselves, the concept of checks and balances can almost be discarded. If the public is informed of what is going on and reacts to the bribing events, then the big companies, who hire the lobbyists, can be forced to alter their mindset by their customers, and the special interest lobbyists can become benefactors for the general
1. From your understanding of the Sarbanes-Oxley Act, explain how you feel it may negatively affect America’s stock exchanges. The higher than expected costs for many public companies caused some companies to abandon their public status. The costs of SOX compliance negatively affect companies, markets, investors, and economic growth. Fewer companies are willing to enter the market because of the SOX requirements that make going public too costly.
As a C-corporation the business, not the owner, would be held liable for any financial damages. Any accidents involving employees or customers would be the responsibility of the corporation to settle. Financially speaking incorporating is the best option because as a sole proprietorship the owner is currently paying a much higher tax rate versus the corporate tax rate. With the tax code being different for corporations there is better profit retention and security. The client also mentioned the issue of partnership and the selling of stock in order to expand the company.
It requires reasonable business thinking to analyze if the stock will go up or down. Hence, it needs a portion of reading the recent news about the corporation. At least, I got an overview of how the stock market work by learning new business terms like short sell, margin, options, and many more. The stock market has influence me to be careful in buying shares from corporations. Stock market can either make me more money or lose more money.
Another risk that the firm faces is legal. Just like employees can file lawsuits against the company other stakeholder groups such as suppliers and customers can also take legal action against the company. The unionization of employees is a risk that can affect the employee relations of the company. A union can ask for exorbitant pay raises which could force Walmart to raise its payroll expenses which would lower the profitability of the firm. A union also has the power to shut down the operations of the firm if the employees go on
Antitrust Claims against Microsoft Monopolies, Trusts and Government Regulations Monopoly occurs when a large corporation or business fixes price to eliminate competition because they are the only major provider of a particular product. Monopoly affects economic growth negatively because since the price cannot be determined by the market, business is restricted. Trusts in business enable confidence to be built so that business can be conducted in fairness. Antitrust policies are regulations by government to ensure that businesses can operate on a certain degree of trust thereby ensuring that the market is not monopolized. Since monopoly caused unreasonable price hike, government must be able to exercise control or consumers and the economy will both be affected.
The fact is that they or more than likely in discord with the other faction. The fundamental objective of a corporate establishment from the perspective of its shareholders is to expand revenues and heighten shareholder value. Operational budgets are a decisive participation expenditure for nearly all companies, an organization attempt to keep overhead under stringent limitation. This in turn has a high probability of making another important group of stakeholders displeased. That would be the employee.
When corruption occurs it damages the reputation of the employees and the business. Society relied upon this firm to assist in making them money but the firm was more concerned with their bottom line. Many of the individuals doing business with these firms lost their life savings and destroyed some of the trust that investors have with the Wall Street firms. It makes people have second thoughts about investing in the stock market. Another effect this unethical behavior had on these organizations been they agreed to pay a penalty of over $1.43 billion dollars as compensation to the victims.
A massive layoff by a business decreases the business’s expenses because they will have fewer employees on the payroll. The business will also have less production and may have less income as a result. A household is affected by a layoff because an entire income is lost. When a household loses an income, spending is decreased to compensate for that loss. Businesses also suffer when massive layoffs occur.