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President of Easton Semiconductor Corporation made this statement in company's annual report:"ESC's main goal is to increase value of our common stockholders equity. Later in the report the folllowing announcements were made:

A. ESC contributed 1.5 million to the symphony orchestra in Bridgeport, Connecticut, where it is headquartered.

B. ESC is spending 500 million to open new plant and expand operations in China. No profits will be manufactured by Chinese operations for 4 years, so earnings will be depressed during this period versus what they would have been had decision not been made to expand in that market.

Describe how ESC's stockholders might view each of these actions, and how the action might influence the stock price.

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M936158

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