Who are the stakeholders in this situation?
In this situation, the stakeholders are stockholders of Molina Corporation. They are the kind of people who have shown interest in the business by investing their resources in it. Similarly, the President Rob Lowery and the Financial Vice President Debbie Oler are also regarded as stakeholders in this ethics case. It is because they all have interest in the business.
Is there anything unethical about Lowery’s intentions or actions?
Lowery’s intentions entailed violating sound and acceptable accounting principles by satisfying short-term personal and company’s needs. His actions might lead to misleading financial statements and this will affect the stakeholders who have invested their resources in the company. Therefore, his actions are unethical and should be avoided.
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?
The stock dividends do not change the stockholder’s equity account since it distributes the additional shares to the shareholders. As a stockholder, I will prefer stock dividend to cash dividend. This is because; a stock dividend will offer me choice. I can choose to keep the shares and hope that my company will use the money not paid out in a cash dividend to earn better return rates. Also, I can sell some new shares and create my own cash dividend. Lastly, I will benefit from stock dividend because stockholders do not have to pay taxes on the value.
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