Who are the stakeholders in this situation

Assignment Help Accounting Basics
Reference no: EM131135691

Garcia Corporation has paid 60 consecutive quarterly cash dividends (15 years). The last 6 months, however, have been a cash drain on the company, as profit margins have been greatly narrowed by increasing competition. With a cash balance sufficient to meet only day-to-day operating needs, the president, Tom Henson, has decided that a stock dividend instead of a cash dividend should be declared. He tells Garcia's financial vice president, Andrea Lane, to issue a press release stating that the company is extending its consecutive dividend record with the issuance of a 5% stock dividend. "Write the press release convincing the stockholders that the stock dividend is just as good as a cash dividend," he orders. "Just watch our stock rise when we announce the stock dividend; it must be a good thing if that happens."

Instructions

(a) Who are the stakeholders in this situation?

(b) Is there anything unethical about Henson's intentions or actions?

(c) What is the effect of a stock dividend on a corporation's stockholders' equity accounts? Which would you rather receive as a stockholder-a cash dividend or a stock dividend? Why?


Reference no: EM131135691

Questions Cloud

Describe the organization as a whole and a specific job : Explain how employees are recruited and selected by the organization. Do they use tests, interviews or application blanks? If there is a standard application, include a copy with your paper as an appendix). Is there a formal job evaluation that d..
Calculate the minimum volume of water needed : Calculate the minimum volume of water needed to dissolve 1.00 g of benzoic acid at 100°C. Calculate maximum theoretical percent recovery from the recrystallization of 1.00 g of benzoic acid from 15 mL of water.
Provide a one paragraph history about sandra life to point : Explain whether Sandra is in Integrity or Despair as defined by Erik Erikson in his Theory of Psychosocial Development. Explore how this transition crisis may be resolved by a HSP conducting a life review with Sandra.
Can these be chosen to induce the pareto optimal growth rate : Will the combination of subsidies to machines and subsidies to research be better than either of these two policies by themselves?
Who are the stakeholders in this situation : What is the effect of a stock dividend on a corporation's stockholders' equity accounts? Which would you rather receive as a stockholder-a cash dividend or a stock dividend? Why?
Describe the purpose of a product feasibility : Describe the purpose of a product/service feasibility analysis- two primary issues that a proposed business should consider in this area.
Determine the relative income of these two economies : Consider two economies with identical technologies and identical initial conditions but with different corporate tax rates, τ and τ' . Determine the relative income of these two economies (as a function of time).
Financial planning and resource allocation decisions : Describe and analyse the role of accounting information in a business context and analyse a set of financial statements including balance sheet, profit and loss accounts and cash flow statements.
Name economic system in which people have important rights : Name an economic system in which people have important rights: - to make economic choices of what products to buy.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Comparative financial statements for heritage antiquing

comparative financial statements for heritage antiquing services for the fiscal year ending december 31 appear on the

  Ethics affectted the financial results

What is an example of a potentially unethical accounting situation? Why is the situation unethical? What is meant by the statement, "You cannot teach ethics"? How do ethics affect the financial results of a company?

  On the statement of cash flows prepared by the indirect

1 goods that are partway through the manufacturing process but not yet complete are referred to as materials inventory.

  Explain the qualitative characteristics of financial reports

Discuss whether you believe the present conceptual framework has delivered advantages.

  Record and post the required closing entries

Record and post the required closing entries, and prepare a post-closing trial balance.

  Circuittown considers gift cards

CircuitTown considers gift cards to be "broken" (not redeemable) 10 months after sale.

  Travis fortney and architect opened an office on april 1

travis fortney and architect opened an office on april 1 2010. during the month he completed the following transactions

  Mehta company traded a used welding machine cost 16371

mehta company traded a used welding machine cost 16371 accumulated depreciation 5457 for office equipment with an

  Range for important measures

Ask a manger in your organization if they would prefer a single point estimate or a range for important measures, and why? Please share what they say.

  Apply formula to compute

Using the information provided and results obtained above, apply formula to compute (i) Accounting Break-even (ii) Cash break-even (ignoring taxes) quantity of sales.

  Consider that under international financial reporting

1. should preferred stock be recognized as a liability as a liabiity or should it be considered equity? defend your

  Schedule which describe assets-liabilities-owner sequity

Balance sheet accounts for Dale's Delight ful Florist Shoppe at the end of a recent fiscal year are listed below. Prepare a schedule demonstrating the assets= liabilities + owner'sequity for the company.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd