Problem
A. Why do traditional open membership cooperatives need a system to redeem equity?
B. Based on the case, what are some of the goals or desirable characteristics of an equity management system?
C. Based on the table from the Journal of Cooperatives how would a 10 year age of stock system compare with the cooperative's current Age 70 system? (It should be noted that the analysis is based on the current age profile of cooperative members. The Age 70 system likely had a much lower budget back with the cooperative was established.)
D. What system keeps equity the most proportion to use?
E. With an age of stock system what happens to proportionality and member benefit as the length of the revolving period decreases? What is the tradeoff in terms of the redemption budget?
F. If you were Rick and Karla would you recommend that the cooperative change their equity management system? If so, what system would you recommend?