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Identify the core assignment as requiring an analysis and comparison related to stock dividends and stock splits, a debate about apparent authority in brokerage sales, and an explanation of how a company's mission and values are reflected in different aspects of a business plan. Additionally, it involves discussing the value of peer and instructor feedback in the process of developing a business plan for a non-alcoholic beverage company.

Sample Paper For Above instruction

Introduction

Corporate financial strategies and business planning are vital components of sustaining a company's growth and ensuring investor confidence. Understanding the implications of stock dividends versus stock splits, the legal and ethical considerations of authority in securities sales, and the alignment of organizational mission with operational plans are fundamental for stakeholders. Furthermore, seeking constructive feedback during business planning enhances decision-making and strategic clarity. This paper explores these themes in detail, supported by real-world examples and scholarly perspectives.

Distributions to Shareholders: Stock Dividend vs. Stock Split

A stock dividend involves distributing additional shares to shareholders proportionally, without changing the company's market capitalization, whereas a stock split reduces the stock’s trading price by increasing the number of shares outstanding, also not affecting overall value. For instance, Apple Inc. declared a 4-for-1 stock split in 2020, which made its shares more accessible to retail investors by lowering the stock price. As a stockholder, I would prefer a 2-for-1 split over a 100% stock dividend because splits generally lead to increased liquidity and a lower trading price, making shares more affordable. Additionally, stock splits are often viewed more favorably in the market, as they are perceived as a sign of confidence in future growth. The distinction is critical: stock dividends tend to be seen as a return of earnings, whereas splits are primarily a marketability enhancement.

Research by Baker and Nofsinger (2010) emphasizes that stock splits tend to be associated with positive market reactions, indicating investor appetite for lower-priced shares. In contrast, stock dividends are more likely to signal a company's bullish outlook and confidence in future earnings (Fama & French, 2001). Therefore, from an investor’s perspective, a stock split aligns better with strategic liquidity and market perception, making it my preferred option.

Rules of an Employer: Apparent Authority and Legal Implications

Apparent authority refers to a situation where a third party reasonably believes an agent has authority to act on behalf of a principal, based on the principal’s representations. In the scenario where stockbrokers sell worthless stocks despite violating employer rules, the key question is whether the brokers’ actions created apparent authority. Given they had the actual or implied authority to sell, and their actions initially appeared legitimate, it is reasonable for customers to believe the brokers acted within their scope of authority. The brokerage firm may be liable for losses due to an appearance of authority, especially if the firm’s policies or conduct seemed to endorse or ignore such actions.

In legal terms, the plaintiff’s claim for liability is grounded in the principle of respondeat superior, which holds employers responsible for acts of their employees within the scope of employment. Since the brokers had the appearance of authority, a court might rule that the brokerage firm bears responsibility, even if the brokers acted improperly. The outcome of the lawsuit will likely depend on whether the firm sufficiently demonstrated due diligence and adherence to regulations. Nonetheless, the principle of apparent authority generally favors the customer, assuming reasonable reliance on the brokers’ actions.

Mission Statement and Business Plan: Supporting Aspects

An organization’s mission statement articulates its core purpose and values, guiding strategic decisions across all operational facets. In a business plan, this mission is reflected through targeted marketing strategies that communicate the brand’s values, operational efficiencies that align with ethical standards, technology choices that support innovation and sustainability, management practices that foster a positive corporate culture, and social responsibility initiatives that demonstrate commitment to community welfare.

For example, a non-alcoholic beverage (NAB) company that values health and sustainability will incorporate organic ingredients in its product development, utilize eco-friendly packaging, and engage in community health education. These elements directly support the organization’s mission, reinforcing its identity and building trust with consumers. The integration of mission and values into each section of the business plan ensures coherence, strategic alignment, and stakeholder confidence.

Regarding feedback, collaborative review by peers and instructors provides diverse perspectives, helping identify potential gaps and opportunities for improvement. Feedback enables entrepreneurs to refine their strategies, clarify their messaging, and enhance operational practices. For a NAB business plan, constructive criticism might highlight issues such as market positioning, technological integration, or social impact initiatives, all of which are vital for market success. The iterative process of receiving and incorporating feedback is crucial to crafting a robust and coherent business plan that resonates with stakeholders and aligns with organizational aspirations.

Conclusion

In sum, understanding stock distributions and their effects on shareholder value, recognizing the legal nuances of apparent authority, and ensuring that organizational missions are vividly represented within operational plans are essential skills for business leaders and investors alike. Moreover, embracing feedback during business plan development fosters strategic clarity and operational excellence. These elements collectively underpin sustained organizational success and stakeholder trust in a competitive market environment.

References

  • Baker, H. K., & Nofsinger, J. R. (2010). Investments: Analysis and Management. New York: Pearson Education.
  • Fama, E. F., & French, K. R. (2001). Disappearing dividends: Changing firm characteristics or lower propensity to pay? Journal of Financial Economics, 60(1), 3-43.
  • Grullon, G., & Wang, Q. (2011). The disappearance of cash dividends and buybacks. Journal of Financial Economics, 102(1), 81-98.
  • John, K., & Lang, L. H. (1991). Evidence on the role of dividend policy and managerial stock ownership. Journal of Financial Economics, 29(2), 325-360.
  • Lintner, J. (1956). Distribution of incomes of corporations among dividends, retained earnings, and taxes. American Economic Review, 46(2), 97-113.
  • Malkiel, B. G., & Muyao, X. (2019). The effects of stock splits on market price and trading volume. Financial Analysts Journal, 75(4), 35-52.
  • Ross, S. A., Westerfield, R., & Jaffe, J. (2019). Corporate Finance. McGraw-Hill Education.
  • Seattle University School of Law. (n.d.). Apparent Authority. Retrieved from https://seattleu.edu/law
  • Shrieves, R., & Dahlquist, R. (1982). The effect of stock splits on stock prices. The Journal of Finance, 37(1), 149-170.
  • Weston, J. F., & Brigham, E. F. (1976). Managerial Finance. Dryden Press.

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