HomeworkLib
Question

Major World Corporation, Inc. (MWCI) acquired 100,000 shares of its own stock exactly one week prior...

Major World Corporation, Inc. (MWCI) acquired 100,000 shares of its own stock exactly one week prior to announcing a major global acquisition that will increase its market share and increase its short-term and long-term profitability. In your opinion, have the officers and directors of MWCI behaved ethically? Explain.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

In my opinion, the act of purchasing own company's shares by MWCI is NOT ethical and they have behaved unethically under this scenario. Purchasing own shares of the company is an act forbidden in law and is illegal as per the norms of market regulator SEC. If a company wants to make a purchase of shares, it should first inform about this to the regulator and then regulator may give permission for such acquisition based on the situations at that point of time. Under the current case, the company was aware that an event is going to take place within a week and which will have a positive impact on the share price of company. Therefore, making purchases just before the event is a case of insider trading by the officers and directors of the company, which attracts strict action.

0 0
Add a comment
Know the answer?
Add Answer to:
Major World Corporation, Inc. (MWCI) acquired 100,000 shares of its own stock exactly one week prior...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • FRC Inc. acquired Marketing Inc on 1/1/2014. Marketing Inc. has 10,000 shares outstanding. Each share in...

    FRC Inc. acquired Marketing Inc on 1/1/2014. Marketing Inc. has 10,000 shares outstanding. Each share in Marketing Inc. was exchanged for half a share in FRC, Inc. Shares of FRC Inc., were trading at $100 per share at the date of the announcement of the transaction. Marketing Inc, had the following assets and liabilities that were assumed by FRC Inc. Assets and Liabilities Book Value prior to acquisition Market Value on acquisition date Cash Accounts Receivables Equipment Patent Short Term...

  • Rocky Dog, Inc. purchases its own stock on the NASDAQ for $600,000 (It purchased 100,000 shares at $6 each). Six months...

    Rocky Dog, Inc. purchases its own stock on the NASDAQ for $600,000 (It purchased 100,000 shares at $6 each). Six months later, Rocky Dog, Inc. then sells 50,000 of its shares held in treasury at $8 per share. Show the transactions you would make for these two entries. Next, let's assume Rock-Dog then sells the remaining shares of treasury it acquired at $2 per share.

  • The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

    The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.20 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $7.20 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a five-year future life was undervalued by $85,500 and a fully amortized trademark...

  • The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

    The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.90 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.90 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $52,500 and a fully amortized trademark...

  • The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

    The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.20 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $7.20 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a five-year future life was undervalued by $85,500 and a fully amortized trademark...

  • The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

    The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.55 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.55 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $59,500 and a fully amortized trademark...

  • The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

    The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.40 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.40 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $62,000 and a fully amortized trademark...

  • In 2020, Concord Corporation acquired 15500 shares of its own $1 par value common stock at...

    In 2020, Concord Corporation acquired 15500 shares of its own $1 par value common stock at $19 per share. In 2021, Concord issued 10500 of these shares at $24 per share. Concord uses the cost method to account for its treasury stock transactions. What accounts and what amounts should Concord credit in 2021 to record the issuance of the 10500 shares? Treasury Stock Additional Paid-in Capital Retained Earnings Common Stock

  • The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

    The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.50 per share on January 1, 2014. The remaining 20 percent of Devines shares also traded actively at $7.50 per share before and after Holtzs acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devines underlying accounts except that a building with a 5-year life was undervalued by $46,500 and a fully amortized trademark with...

  • The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

    The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.80 per share on January 1, 2014. The remaining 20 percent of Devine’s shares also traded actively at $6.80 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year life was undervalued by $84,000 and a fully amortized trademark with...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT