The management pursue as their overriding goal

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The share price has declined $2 per share in last 9 months but firm profits are rising. The company has a profit-sharing plan under which all managers are partially compensated on the basis of firm profits. The company has never paid a dividend. • The company has been dumping pollutants & is currently being sued by government agencies

A. What should the management pursue as their overriding goal? Why?

B. Does the firm appear to have an agency problem? Explain .

C. Evaluate the firm’s approach to pollution control. Does it seem ethical? Why might incurring expense to control pollution be in the best interests of the firm’s owners despite its negative impact on profits?

D. On the basis of the information provided, what specific recommendations would you offer the firm?

Reference no: EM131034952

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