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AP10-5 Put yourself in the shoes of a company president: The extremely successful launch of a new product has resulted in an additional 55 million in unexpected operating cash flows. You can think of several ways to use the extra $5 million. One alternative president, you are accountable to the board of directors, which is elected by the shareholders. Rather than pay a dividend, you could repurchase shares of the company's own stock. The stock seems currently to be underpriced, and by purchasing treasury shares you are distributing surplus cash to shareholders without giving is to pay out a special dividend to the shareholders. As them taxable dividend income. special year-end bonus to You could also pay a employees, that would average 310,000 per employee, quite a nice holiday bonus. After all, it was the employees' hard work and dedication that eaned the money in the first place. your employees. With 500 Or you could use the money to reinvest in the company. By reinvesting the money, it might be easier to continue the upward earnings trend in the future. Finally, you could approach the board of directors for a compensation adjustment of your own. It's company been a gre at year, and you are the president of the Shouldn't you at least share in the success? Required Determine how you would allocate the additional $5 million. Are there other areas in which to spend the money not mentioned in the above case? Is it ethical for the president to be directly compensated based on the company's performance each year