BYP11-10 Greenwood Corporation has paid 60 consecutive quarterly cash dividends (15 years).

BYP11-10 Greenwood Corporation has paid 60 consecutive quarterly cash dividends(15 years). The last 6 months have been a real cash drain on the company, however, asprofit margins have been greatly narrowed by increasing competition. With a cash balancesufficient to meet only day-to-day operating needs, the president, Gil Mailor, has decidedthat a stock dividend instead of a cash dividend should be declared. He tells Greenwood’sfinancial vice-president, Vicki Lemke, to issue a press release stating that thecompany is extending its consecutive dividend record with the issuance of a 5% stockdividend. “Write the press release convincing the stockholders that the stock dividend isjust as good as a cash dividend,” he orders. “Just watch our stock rise when we announcethe 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 president Mailor’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?

Order the answer to view it

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount

Posted in Uncategorized