Rusty and Sylvia Are Shareholders of Global Hotel Corporation

question 72

Multiple Choice

Rusty and Sylvia are shareholders of Global Hotel Corporation. Global's directors fail to declare a dividend. Rusty and Sylvia could succeed in asking a court to order the directors to meet and declare a dividend

• A) if Global has sufficient earnings available to pay a dividend.
• B) if Global has cash reserves.
• C) if withholding a dividend is an abuse of the directors' discretion.
• D) under no circumstances.

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture due to various factors including market fluctuations, economic conditions, or management decisions.

Liquidating Corporation

A process wherein a company sells its assets, pays off creditors, and distributes any remaining assets to shareholders, effectively dissolving the company.

Bankruptcy and Insolvency Act

Legislation that provides the legal framework for the resolution of financial distress and insolvency situations, including the reorganization or liquidation of debtor assets.

Capital Structure

The mix of different forms of capital, such as debt, equity, and hybrid securities, used by a company to fund its operations and growth.