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Lunna [17]
2 years ago
9

You sit on the board of a public corporation. Your CEO has proposed taking steps to offset the carbon impact of your​ company's

manufacturing process. Doing so will add to the​ company's overall expenses. Your CEO​ argues, however, that this action will actually increase the stock​ price, maximizing shareholder wealth. Why might​ socially-responsible activities also be​ value-maximizing?
Business
2 answers:
Natalka [10]2 years ago
5 0

Answer:

The positive and negative effects of corporate social responsibility (CSR) on profits and stock price are not definite, with a lot of debate still going on between sides that favor CSR and those against it. Lately though, the debate is being won by those favoring CSR.

Explanation:

The position against CSR is very simple, it increases costs and higher costs result in lower profits, which in turn result in lower stock price. In Europe a lot of studies have been carried out regarding the effects of CSR, and not all show unanimous results. Depending on the industry and the country, CSR can really boost sales and stock price, but on other places it simply doesn't seem to affect them.

For example, the usual corporate suspects of representing the worst type of evils, oil companies and banks, are not affected by CSR. Probably since no one expects oil companies or banks to do something good, even when they try no one believes them.

But on the hand, most normal, non diabolic corporations usually tend to benefit from CSR. Even electric companies which are the cousins of oil companies, benefit and a lot from it. Any time a electric company engages in green alternatives, its stock price skyrockets.

The same for car manufacturers, even though electric or hybrid cars represent less than 1% of total cars manufactured. The same applies to fashion industry, consumer goods, and many more.

serious [3.7K]2 years ago
4 0

Answer:

Socially -responsible activities might be value-maximizing because there are green investors out there who want to be identified an environmentally-conscious firm.

Explanation:

Environmental footprints such as carbon impact are not taken for granted by investors as they perceive a company as being responsible and worthy of their investment if it cares about the environment and its impact of negative externalities on its host community.

In fact, some consumers even check out a product for signs of environmental consciousness on it before making purchase, such disposition also transcends to investment decisions as well.

Hence, such companies that are conscious  have their shares being highly  demanded, forcing share price to rise  as well as the overall value of the entity.

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A comparative balance sheet for Culver Corporation is presented as follows.
laila [671]

Answer:

Increase in cash = $50,740

Explanation:

The statement of cash flows for 2020 can be prepared as follows:

Culver Corporation

Statement of Cash Flows

For December 31, 2020

<u>Particulars                                                               $                       $             </u>

Net income                                                        127,440

Adjustment to reconcile net income:

Depreciation expenses (w.1)                             26,740

(Increase) decrease in current assets:

Increase in accounts receivable (w.2)             (15,740)

Decrease in inventory (w.3)                                9,260

Increase (decrease) in current liabilities:

Decrease in accounts payable (w.4)             <u>  (13,260)  </u>

Net cash from operating activities                                          134,440

<u>Cash Flow from Investing Activities </u>

Sales of land (w.5)                                             39,260          

Purchase of equipment (w.6)                         <u> (59,740) </u>

Net cash from investing activities                                            20,480

<u>Cash Flow from Financing Activities</u>                                      

Cash dividends paid                                      <u>  (63,220)  </u>

Net cash from financing activities                                         <u>   63,220   </u>

Increase / (Decrease) in cash                                                     50,740

Beginning cash balance                                                           <u>   22,000  </u>

Ending cash balance                                                                <u>   72,740</u><u>  </u>

Workings:

w.1: Depreciation expenses = Accumulated Depreciation in 2020 -  Accumulated Depreciation in 2019 = $70,220 - $43,480 = $26,740

w.2: Increase in accounts receivable = Accounts receivable in 2020 - Accounts receivable in 2021 = $83,220 - $67,480 = $15,740

w.3: Decrease in inventory = Inventory in 2020 - Inventory in 2019 = 181220 190480 = -$9,260

w.4: Decrease in accounts payable = Accounts payable in 2020 - Accounts payable in 2019 = ($35,220 - $48,480) = $13,260

w.5: Sales of land = Land in 2019 - Land in 2020 = ($111,480 - $72,220) = $39,260

w.6: Purchase of equipment = Equipment in 2020 - Equipment in 2019 = $261,220- $201,480 = $59,740

7 0
3 years ago
Suppose your manager wanted you to copy two other managers on the survey email to your coworker. Where would you put the manager
liberstina [14]

Answer: Idk :\ good luck tho

3 0
3 years ago
Deadweight loss is the a. decline in government revenue when taxes are reduced in a market. b. decline in consumer surplus when
Marat540 [252]

Answer:

D, decline in total surplus that results from a tax.

Explanation:

Dead-weight loss is also known as excess burden. It is a situation where in there is a loss of economic sufficiency as a result of tax.

This economic sufficiency is when the supply of goods and services aren't met. That is, there is no market equilibrium between demand and supply. Taxes, subsidies, price rise or fall can be the reason for dead-weight loss as it causes the imbalance of demand and supply of goods or services to the consumers through price manipulations.

To calculate dead-weight loss, change in price as well as change in quantity demanded are important factors to consider.

Cheers.

3 0
3 years ago
Read 2 more answers
On September 1, Vicario, Inc., borrows $100,000 from First National Bank at 6 percent annual interest. This note is due in 90 da
Tomtit [17]

Answer:

Explanation:

The journal entry is shown below:

Cash A/c Dr $100,000            

     To Notes payable A/c $100,000        

(Being the issuance of the note payable is recorded)

For recording this transaction, we debited the cash account as it increases the asset and credited the note payable account as it also increases the liabilities account    

5 0
3 years ago
Which two regularly issued instruments are closely watched as economic indicators? (SELECT TWO answers.)
Finger [1]

The Dow Jones industrial average (stocks) and Retail Sales Report.

Both of these are rapidly changing indicators of movement in the economy.

4 0
3 years ago
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