Read the following scenario and answer the question in 5–10 sentences. In 2007, Makber, Inc., began a music video entertainment company specializing in personalized modifications of existing music videos at the individual user level. Since that time, the corporation has diversified into the development of clothing lines and manufacturing of electronics. The percentage of the corporation's music video division has decreased from 100 percent of its total assets, net worth, total revenues, and earnings to 29 percent of its total assets, 22 percent of its net worth, and 15 percent of Makber's revenue and earnings. After careful review of its current business model and growth projections, Makber has decided to sell off its music video division without the consent of the shareholders. A large contingent of shareholders that bought stock at the inception of Makber have an emotional connection to the music video products and are up in arms. If you were on the Board of Directors for Makber, how would you justify your decision to the sell the division without consent of the shareholders?
Read the following scenario and answer the question in 5–10 sentences. In 2007, Makber, Inc., began a music video entertainment company specializing in personalized modifications of existing music videos at the individual user level. Since that time, the corporation has diversified into the development of clothing lines and manufacturing of electronics. The percentage of the corporation's music video division has decreased from 100 percent of its total assets, net worth, total revenues, and earnings to 29 percent of its total assets, 22 percent of its net worth, and 15 percent of Makber's revenue and earnings. After careful review of its current business model and growth projections, Makber has decided to sell off its music video division without the consent of the shareholders. A large contingent of shareholders that bought stock at the inception of Makber have an emotional connection to the music video products and are up in arms. If you were on the Board of Directors for Makber, how would you justify your decision to the sell the division without consent of the shareholders?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Read the following scenario and answer the question in 5–10 sentences.
In 2007, Makber, Inc., began a music video entertainment company specializing in personalized modifications of existing music videos at the individual user level. Since that time, the corporation has diversified into the development of clothing lines and manufacturing of electronics. The percentage of the corporation's music video division has decreased from 100 percent of its total assets, net worth, total revenues, and earnings to 29 percent of its total assets, 22 percent of its net worth, and 15 percent of Makber's revenue and earnings. After careful review of its current business model and growth projections, Makber has decided to sell off its music video division without the consent of the shareholders. A large contingent of shareholders that bought stock at the inception of Makber have an emotional connection to the music video products and are up in arms. If you were on the Board of Directors for Makber, how would you justify your decision to the sell the division without consent of the shareholders?
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