Read the following case carefully, then give the answer of the questions given below. The case: Management Vs Shareholders The annual shareholders meeting at the Mustafa Company brought some shock to the management and the board of directors, when a group of shareholders complained vigorously about the companies financial policies. However, expressions of dissatisfaction by one or two shareholders had not been uncommon in the past, the companys senior executives were surprised by the degree of support for the protest group voice by other stockholders. Shareholder Complaints: The initial target of the complaints was the companys policy of not paying dividend in almost two years. The chairman of the board, Mr. Salman Mustafa, responded that the company had been experiencing poor profitability and had needed all available funds to maintain its investments. Other shareholders rose to complain that the companys policy of not using borrowed money limited its ability to make investments and pay dividends. Again the chairman responded, this time citing the need for caution in the way the company was financed. He gave several examples of multinational companies that had been heavy borrowers and had recently gone bankrupt. To this another shareholder complained that, if the company were more aggressive in its investment policies, there would be enough money for everything. Until you start taking some chances of new ideas and new products, our stock prices will continue to go down instead of up. I could have earned more by putting my money in government bonds, complained the shareholder. Admit it, another shareholder shouted, You increase your wealth with your fancy salaries and fancy offices couldnt careless about us little investors. But then why would you? Most of you dont even own stock in the Company. Loosing his temper, the Chairman replied angrily that his own ancestors had founded the business and still owned almost 10 percent of the shares outstanding. He added that the company, adding, And Im not saying that just because my son, Ahmed is president. After all, nobody forced you to buy your stock and nobodys forcing you to keep it. In fact, I would personally be more than happy to buy your stock from you with my own money. Now I ask the rest of you shareholders, concluded the Chairman broadly, would you rather have your company be safe and secure or bankrupt? 1. Identify the principal financial policies being debated. 2. Considering the perspective of management only, what tendencies do you see in each of these financial policies? 3. Considering the perspective of shareholders only, what tendencies do you see in each of these financial policies? 4. The Mustafa Companys creditors are not directly mentioned in the case, but what do you think their preferences would be with regard to each of the financial policies? 5. Use some ideas of your own to indicate how Mustafa Companys shareholders might persuade management to move in the direction of shareholders preferences