Instruction
1) Which theory do you believe is correct, Stockholder Theory or Stakeholder Theory? Why? What makes the theory you chose right, and the other theory wrong?
2) Read the case study, "Peabody Energy and Patriot Coal" (p. 105-106 in textbook). Peabody Energy's decision to spin off a new company, Patriot Coal, was completely legal. However, do you believe this decision was ethical or unethical? Why?
3) Do you think Peabody Energy's actions should be guided by Stockholder Theory or Stakeholder Theory? What would that theory say the corporate executives of Peabody Energy should do?