Person PD is a writer and management consultant who believed that it is the ethical responsibility of the firm to make profit. He stated that business without profit is wasting the resources of the society and the profitable business is creating opportunities. However, the business should not abandon ethics for the profits. It will result in huge loss in profit and reputation. In 1999, Drug V was introduced by Company M and quickly reached the public. The firm found that people who are using the drug is suffered from the risk of heart attacks. However, they continued to supply. By the time they withdrawn the drug from the market, 20 million people have used it and 38,000 had died. They have lost their market, reputation, and there is a huge drop in the share price. It happened because the firm abandoned the business ethics for the profit. To determine: The effect of increased cost of capital on the future investment of the firm.

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Chapter 9.1, Problem 1FOE

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Person PD is a writer and management consultant who believed that it is the ethical responsibility of the firm to make profit. He stated that business without profit is wasting the resources of the society and the profitable business is creating opportunities. However, the business should not abandon ethics for the profits. It will result in huge loss in profit and reputation. In 1999, Drug V was introduced by Company M and quickly reached the public.

The firm found that people who are using the drug is suffered from the risk of heart attacks. However, they continued to supply. By the time they withdrawn the drug from the market, 20 million people have used it and 38,000 had died. They have lost their market, reputation, and there is a huge drop in the share price. It happened because the firm abandoned the business ethics for the profit.

To determine: The effect of increased cost of capital on the future investment of the firm.

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