II. Lois Kenseth, president of Sycamore Corporation, is concerned about several large stockholders who have been very vocal lately intheir criticisms of her leadership. She thinks they might mount a campaign to have her removed as the corporation's CEO. She decidesthat buying them out by purchasing their shares could eliminate them as opponents, and she is confident they would accept a "good" offer. Kenseth knows the corporation's cash position is decent, so it has the cash to complete the transaction. She also knows the purchaseof these shares will increase earnings per share, which should make other investors quite happy. (Earnings per share is calculated bydividing net income available for the common shareholders by the weighted-average number of shares outstanding. Therefore, if thenumber of shares outstanding is decreased by purchasing treasury shares, earnings per share increases.) Instructions Answer thefollowing questions.a. Who are the stakeholders in this situation?b. What are the ethical issues involved?c. Should Kenseth authorize the transaction?-11-

This scenario involves Lois Kenseth, the CEO of Sycamore Corporation, who is facing the challenge of…

Answered: II. Lois Kenseth, president of Sycamore…

Business Its Legal Ethical & Global Environment

10th Edition

ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter18: Governance And Structure: Forms Of Doing Business

Section18.7: International Issues In Business Structure

Problem 2DQ

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