Flambeau Corporation has paid 60 consecutive quarterly cash dividends (15 years' worth). The last six months have

Question:

Flambeau has paid 60 consecutive quarterly cash dividends (15 years' worth). The last six months have been a real cash drain on the company, however, as profit margins have been greatly narrowed by increasing competition.
With a cash balance that is only enough to meet day-to-day operating needs, the president, Vince Ramsey, has decided that a stock instead of a cash should be declared. He tells Flambeau's financial vice-president, Janice Rahn, to issue a press release stating that the company is extending its consecutive record with the declaration of a 5% stock "Write the press release convincing the shareholders that the stock is just as good as a cash he orders. "Just watch our share price rise when we announce the stock it must be a good thing if that happens."
Instructions
(a) Who are the in this situation?
(b) What is the effect of a stock on a corporation's shareholders' equity accounts?
(c) Will the share price rise if a stock is declared, as the president expects?
(d) Is there anything unethical about President Ramsey's intentions or actions?
Stakeholders
A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees,... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...