Vinal Barbaros's Options Essay Example | Topics and Well Written Essays - 2000 words

Vinal Barbaross Options - Essay ExampleFrom this study it is clear that when the issues are revealed, conflicts whitethorn arise from agency interests, as the uncertainty in the follows future due to its failing operations whitethorn threaten the status quo, especially when it comes to cost-cutting roundivities such as downsizing in order to address the line of work on profitability. One of the key stakeholders in this case is the companys major investor, the creditor National Bank of Australia. If the company reports the lawful amount of the cost estimates, the bank result have to protect its position with regard to its investment in the company. This can be done by downgrading the companys credit rating and increasing the interest payments due to default, or look for a second way out when it comes to getting the amount that is due. In this case, the owner or the major shareholder is deprived of knowing the true performance of the company. Because he does not know, he cannot do something in order to preserve his wealth or shareholder value. As for the companys employees, they will not be informed of the companys shortcomings with regard to dealing with its efficiency and operations productivity. As for the companys major investor, its creditor the National Bank of Australia, it will be able to grant a renewal on the companys loan by assuming that nought is wrong in the companys operations, which puts its financial position in the company at risk because of misleading information. If the company continues to fail during its subsequent operations, the bank will have to suffer and absorb the losses with regard to the companys distress to pay on time. If the company has been able to recoup its losses, the bank has still been misled by the company because of the act when it is found out, the bank can resort to proper means in order to compensate it for the affirmable losses from such act.