Media One owns 18% of the voting stock of Web Talk, Inc. The remainder of the Web

Question:

Media One owns 18% of the voting stock of Web Talk, Inc. The remainder of the Web Talk stock is held by numerous investors with small holdings. Austin Cohen, president of Media One and a member of Web Talks board of directors, heavily influences Web Talks policies. Under the market value method of accounting for investments, Media Ones net income increases as it receives revenue from Web Talk. Media One pays President Cohen a bonus computed as a percentage of Media Ones net income. Therefore, Cohen can control his personal bonus to a certain extent by influencing Web Talks dividends. A recession occurs in 2010, and Media Ones income is low. Cohen uses his power to have Web Talk pay a large cash The action requires Web Talk to borrow in order to pay the What are the ethical issues in the Media One case?
2. Who are the ? What are the possible consequences to each?
3. What are the alternatives for Austin Cohen to consider? Analyze each alternative from the following standpoints:
(a) Economic
(b) Legal
(c) Ethical.
4. Discuss how using the equity method of accounting for investment would decrease Cohen’s potential for manipulating his bonus.

Stakeholders
A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees,... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...