Scruffy Murphy is the president and principal stockholder of Scruffy's Bar & Grill, Inc To expand, the

Question:

Scruffy Murphy is the president and principal stockholder of Scruffy's Bar & Grill, Inc To expand, the business is applying for a $350,000 bank loan. To get the loan, Murphy is considering two options for beefing up the owners' equity of the business:
Option 1. Issue $200,000 of for cash. A friend has wanted to invest in the company. This may be the right time to extend the offer.
Option 2. Transfer $200,000 of Murphy's personal land to the business, and issue to Murphy. Then, after obtaining the loan, Murphy can transfer the land back to himself and zero out the common stock.
Requirements
Use the ethical decision model in Chapter 1 to answer the following questions:
1. What is the ethical issue?
2. Who are the ? What are the possible consequences to each?
3. Analyze the alternatives from the following standpoints: (a) economic, (b) legal, and (c) ethical.
4. What would you do? How would you justify your decision? How would your decision make you feel afterward?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... 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,...