Evaluating an Ethical Dilemma You are the president of a very successful biotech company that has...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/66488cc633c6c_66166488cc5c50d2.jpg)
Transcribed Image Text:
Evaluating an Ethical Dilemma You are the president of a very successful biotech company that has had a remarkably profitable year. You have determined that the company has more than $10 million in excess cash that was generated by operating activities during the year. You are thinking about paying it out to stockholders as a special dividend. You discuss the idea with your vice president, who reacts angrily to your suggestion: Our stock price has gone up by 200 percent in the last year alone. What more do we have to do for the owners? The people who really earned that money are the employees who have been working 12 hours a day, 6 or 7 days a week, to make the company successful. Most of them didn't even take vacations last year. I say we have to pay out bonuses and nothing extra for the stockholders. As president, you know that you are hired by the board of directors, which is elected by the stockholders. What is your responsibility to both groups? How would you recommend allocating the $10 million? Evaluating an Ethical Dilemma You are the president of a very successful biotech company that has had a remarkably profitable year. You have determined that the company has more than $10 million in excess cash that was generated by operating activities during the year. You are thinking about paying it out to stockholders as a special dividend. You discuss the idea with your vice president, who reacts angrily to your suggestion: Our stock price has gone up by 200 percent in the last year alone. What more do we have to do for the owners? The people who really earned that money are the employees who have been working 12 hours a day, 6 or 7 days a week, to make the company successful. Most of them didn't even take vacations last year. I say we have to pay out bonuses and nothing extra for the stockholders. As president, you know that you are hired by the board of directors, which is elected by the stockholders. What is your responsibility to both groups? How would you recommend allocating the $10 million?
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Policy development and the aging population in the United States
-
You are the president of a very successful Internet company that has had a remarkably profitable year. You have determined that the company has more than $10 million in cash generated by operating...
-
Around nine in the morning on April 24, 2013, Rana Plaza, an eight-story building in Savar, Bangladesh, collapsed catastrophically in a hail of twisted concrete, steel bar, and sewing machinery. At...
-
Craig's Bowling Inc. operates several bowling centres (for games and equipment sales). The following transactions occurred in November 2017. For each of the following transactions, complete the...
-
Compare the incentives of the judge and the lawyers with respect to the time allocated to a trial.
-
Was Teslas human resource strategy consistent with its overall strategy to produce uncompromising high-performance cars?
-
10. What are some barriers to effective delegation?
-
McKinney & Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney & Co. made credit sales of $1,500,000 in Year 1. McKinney & Co. estimates 2.5% of its sales will be...
-
nung Principles - Wild, Shaw, and Chiappetta, 23e, Flexible Budgets and Standard Costs XYZ Company makes one product and has calculated the following amounts for direct labor: AH XAR = $84,000; AH X...
-
Shell Company, an 85% owned subsidiary of Plaster Company, sells merchandise to Plaster Company at a markup of 20% of selling price. During 2019 and 2020, intercompany sales amounted to $442,500 and...
-
Revaluing and Contributing Assets to a Partnership Marquis Westbury invested $61,000 in the Trenton and Rainwater partnership for ownership equity of $61,000. Prior to the investment, equipment was...
-
A company determines that monthly sales S(t), in thousands of dollars, after t months of marketing a product is given by S(t) = 23-551 + 230t+ 160. a) Find S'(1), S'(2), and S'(4). b) Find S''(1),...
-
Dan is a 16 year-old who decided to skip his adolescent development class. If Dan was 19 years-old, this would be his choice, but because of his age, he has broken the law. What type of offence did...
-
You need to remove a bolt from a metal door. The maximum torque the bolt can withstand before starting to rotate is 7 = 70 N-m. You apply a wrench of m = 0.5 kg and 1 = 0.3 m long. You push down on...
-
Lesson 10.1: Emotional Intelligence Emotional Intelligence is a type of social intelligence that affords the individual the ability to monitor his own and others' emotions, to discriminate among...
-
Harriet??s annuity has a total cash value of $2000, and she has paid a total of $1,500 into it. Under a Section 1035 exchange, Harriet rolls the entire value of the annuity into a different annuity....
-
Consider a single-product inventory system in which customers asking for the product arrive according to a Poisson process with rate . Each customer asks for one unit of the product. Each demand...
-
What is a content filter? Where is it placed in the network to gain the best result for the organization?
-
Prepare financial statements for not-for-profit organizations. AppendixLO1
-
The Black Lives Matter (BLM) movement and recent incidents of police brutality illuminate race and inequality issues that have plagued America for many decades. Over time the policy community has...
-
Prepare journal entries related to typical events of a not-for-profit organization. AppendixLO1
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App