Dividend Policy Hancock Inc. is owned by nearly 100 shareholders. Judith Stitch owns 48% of the stock.

Question:

Policy Hancock Inc. is owned by nearly 100 shareholders. Judith Stitch owns 48% of the stock. She needs cash to fulfill her commitment to donate the funds to construct a new art gallery. Some of her friends have agreed to vote for Hancock to pay a larger-than-normal to shareholders. Judith has asked you to vote for the large because she knows that you also support the arts. When informed that the may create a working capital hardship on Hancock, Judith responded: “There is plenty of money in Retained Earnings. The will not affect the cash of the company.” Respond to her comment. What ethical questions do you and Judith face? How would you vote?

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...