After being asked how General Electric has maintained such consistent earnings growth over the past decade, Dennis
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REQUIRED:
a. Determine what reporting strategy GE seems to be using, and explain how it works.
b. Explain how discretionary restructuring charges help GE to implement that reporting strategy and why the company would want to pursue it.
c. The Wall Street Journal reported that “investors love restructurings” and that such charges seem to boost stock prices. Yet the FASB later cracked down on this popular corporate practice. Explain why investors might love restructurings, why stock prices seem to rise when they are announce, and why the FASB acted to limit such behavior.
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