Question

For this discussion consider the following: Is a Corporation a Public Service entity that exists to serve the public or the shareholder interests as well? Include examples to back up your post.

Answer 1

Answer:

Corporation- It is a group of people that do business for achieving a common vision, mission and goals. It is owned by shareholders, shareholders are not personally responsible for any debt of corporation. Corporation is a separate legal entity.

Corporation serves the Public- Corporation serves the public by making products or providing services to them, corporation understand the need, want and demand of customers and make the products or deliver the service accordingly, they try to provide quality service/product at cheaper prices to get the customer satisfaction and loyalty.

Corporation serves Shareholder- A public Corporation, whose shares are traded on exchange, takes care the needs of shareholders also. Shareholders are the owners of the company and they have voting rights, they give their capital to corporation and in return, get shares of the company.

Shareholders get return in form of capital appreciation and dividend. Sometimes they get higher returns, sometimes lower but sometimes, due to some reasons if company's share price is not doing well in the market from long time then company management needs to buyback the shares from the market to increase per share value so that shareholder's wealth can be increased.

Apart from capital appreciation, dividend and buyback, shareholders also get bonus shares. If company is not able to pay dividend in cash then it issues bonus shares.