The president of Exelon Corporation (EC) made this statement in the company’s annual report: “EC’s primary goal is to increase the value of our common stockholders’ equity.” Later in the report, the following announcements were made:
a. The company contributed $1.5 million to the symphony orchestra in Birmingham, Alabama, its headquarters city.
b. The company holds about half of its assets in the form of U.S. Treasury bonds, and it keeps these funds available for use in emergencies. In the future, though, EC plans to shift its emergency funds from Treasury bonds to common stocks.
Discuss how EC’s stockholders might view each of these actions and how the actions might affect the stock price.