@coachdcj Player 2 is correct. From the Official Rules Clarifications document (page 4):
You can never give an ally anything: units, territories or I.P.C.'s.
Say I am conducting shore bombardment, does every one of my units get to fire? Say I have 5 battleships(marked with a red chip) do I get to fire 5 times??? As you can tell I am a TOTAL NOOB, and have never played a game of A&A yet. BTW I am playing A&A revised.
Yes, each battleship will get one shore bombardment. I would question why you would ever spend the money for five battleships, but you are correct.