Sunbeam: Balance Sheet and Shareholders Wealth

966 WordsMar 26, 20124 Pages
To put it simply, in financial terms, to maximize shareholders wealth means to maximize purchasing power. Throughout the years, we have learned that markets are most efficient when the company is able to maximize at the current share price. Every company’s main goal should be to strive to maximize its value to every single one of their shareholders. Common stock represents the value of the market price, and it also gives the shareholder an idea of the different investment, financing, and dividend decisions made by that particular firm. When it comes to the Sunbeam case, I think that in the beginning, June of 1996, Albert Dunlap definitely succeeded in maximizing shareholders’ wealth. It seems to me that he was more of a short term…show more content…
The suit basically stated that Dunlap and Sunbeam were in clear violation of the Securities Exchange Act of 1934 by omitting material information concerning the business operations, sales, and sales trends of the company. On June 13, 1998, Dunlap was fired by the board of directors, and on that very same day Sunbeam announced a new organizational structure. They started by first naming a senior management team. Sunbeam claimed that their new focus was going to be on consumers and expansion, very simple, but at this point that is all they could do. In conclusion, Albert Dunlap did indeed maximize shareholders’ wealth for a short amount of time. He was a smart man and knew what he was doing; however, I feel he got caught up in the success of it all to quickly to realize right from wrong. When it came to the long-term life of the company he didn’t do his best to continue to maximize shareholders’ wealth. Dunlap was only focusing on what was efficient for the time being, he had no long-term plan whatsoever and that ended up really hurting him in the end, causing his termination. Works Cited • Stanwick, Sarah. (2003) Sunbeam Corporation: "Chainsaw Al" and the Quest for a Turnaround. Retrieved December 1, 2008, from http://www.auburn.edu/~stanwsd/sunbeam.html • Ferrell, O.C. (2009) Sunbeam and

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