Question

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?

Answer 1

answer-

I would justify my decision to shareholders by showing the financial statements like profit and loss, balancesheet etc and market demand of our music product which has been decreased and out other product lines are improving. so i would justify that i take the decision in the best interest of the company and its shareholders to sell non profit product line and invest that money in more profitable product line which would give improved earnings and improved total revenues to our shareholders.