International Business: The Challenges of Globalization (8th Edition)
International Business: The Challenges of Globalization (8th Edition)
8th Edition
ISBN: 9780133866247
Author: John J. Wild, Kenneth L. Wild
Publisher: PEARSON
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Chapter 13, Problem 6EC
Summary Introduction

To discuss:

The ethical issues that could arise in conjunction with each other entry mode discussed.

Introduction:

There are three types of Investment entry mode:

  1. Wholly owned subsidiaries
  2. Joint ventures
  3. Strategic alliances

Wholly owned subsidiary is a facility that is entirely owned and controlled by a single parent company. Companies can establish wholly owned subsidiary either by forming a new company and constructing entirely new facilities such as factories, offices, and equipment or by purchasing an existing company and internalizing its facilities.

Joint ventures are created when two or more independent entities come together to achieve a common business purpose.

Strategic alliances are created when two or more entities cooperate to achieve each other’s goal in business. For example, a company and its suppliers can be strategic partners.

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On December 31, 2023, Berclair Incorporated had 360 million shares of common stock and 12 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 40 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. • Four million treasury shares were sold on October 1. . Net income for the year ended December 31, 2024, was $600 million. Also outstanding at December 31 were 60 million incentive stock options granted to key executives on September 13, 2019. The options were exercisable as of September 13, 2023, for 60 million common shares at an exercise price of $60 per share. During 2024, the market price of the common shares averaged $80 per share. The options were exercised on September 1, 2024. Required: Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have…
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