What are the three things a cooperative board of directors must balance when making profit allocation decisions (when deciding how to utilize their profitability that year)?
1, Handling of Extraordinary Gain
All net income in a fiscal year must be distributed by the
cooperative board of directors based on current year’s patronage or
based on patronage over a historical number of years.
2. Distribution of Liquidation Proceeds.
The cooperative board of directors needs to find an effective method for distributing liqiodation proceeds amongst its members. One approacg to distibuting these is to distibute it 1st, to preferred stock if any, 2nd to named patronage equity, and, 3rd to common stock or member capital
3, Creation of Allocation Units.
Many Bylaws authorize the board to create allocation units to determine and distribute net income.The board may allocate net income in divisions established on any reasonable basis, such as based on business or product line or based on geographic operation.
What are the three things a cooperative board of directors must balance when making profit allocation...
Suppose a company receives a windfall of cash. What factors should the board of directors consider when deciding how to allocate the newly found capital? minimum 150 words
Suppose a company receives a windfall of cash. What factors should the board of directors consider when deciding how to allocate the newly found capital? minimum 150 words
QUESTION FOUR Dividend policy refers to the explicit or implicit decision of the Board of Directors regarding the amount of residual earnings (past or present) that should be distributed to the shareholders of the corporation. Required: Discuss the theories of dividend policy and their implication on managerial decision making. (9 Marks) Explain any three factors that shouldbe considered when deciding the dividend policy to be implemented. (3 Marks) Consider company XYZ that wishes to spend K150, 000 on new projects...
Solve the problem There are 5 members on a board of directors. If they must elect a chairperson, a secretary, and a treasurer, how many different slates of candidates are possible? A. 60 B. 120 OC. 50 D.40 QUESTION 2 Find the indicated probability. Round your answer to 6 decimal places when necessary. A fair coin is tossed 4 times. What is the probability of not getting all heads? O A 7/8 B. 3/4 O C 15/16 O D. 1/2...
The board of directors of UT Wireless, Inc. is considering two compensation plans for the CEO of the company. The first would pay the CEO a salary of $300,000 for the upcoming year. The second would pay the CEO a salary of $150,000 and provide the CEO with a stock option to buy 100,000 shares of stock for $11 per share. The current price per share of UT Wireless, Inc. stock is $9 per share. The stock option expires at...
The board of directors of Long River Limited is meeting to discuss the past years results before releasing financial statements to the public. The discussion includes this exchange of conversation: Samson, company CEO: "This has not been a good year! Revenue is down and expenses are way up. If we are not careful, we41 report a loss for the third year in a row. I can temporarily transfer some land that I own into the company's name, and that will...
Question 1 [Balance Scorecard) A). The board of directors of ClariMak, a manufacturing enterprise has tasked its management to develop a new mission statement that details the enterprise's line of business, market size and niche. The new mission statement reads: "We want to continually grow through our commitment to quality and delivering quality products to our customers”. In addition, the management of ClariMak developed the following set of vision statements to complement the mission statement: • Provide superior returns to...
Compose a memo addressing the allocation of profits to three partners of a new business: Alan, Bob, and Carol. It is your responsibility to address the potential ways in which the first-year profits can be divided among these partners, including whether the partners should be taking a salary, how the partners' capital accounts may be affected by various decisions, and the most ethical way that the profits could be divided. Your memo should answer the following prompt: A new business...
As mentioned in Chapter 1, when making financial decisions (such as decisions relating to what investments to make and how to finance them), managers should choose the decision that maximizes owners' wealth. The book stresses that managers should target owners' wealth maximization rather than profit maximization. Please comment on one or more of the following: . Why is the textbook not recommending targeting maximizing of profits? What are the supposed benefits of targeting owners' wealth? . How can managers target...
A company has three open seats on its board of directors. There will be a single election to determine the winner of all open seats. As the owner of 50,000+(5,000) shares of stock, you will receive one vote per share for each open seat. You decide to cast all of your votes for a single candidate. a. What is this type of voting called? What is the number of votes you can cast? b. With this type of voting, suppose the company...