If the Raintree Company Has Accumulated Earnings Each Year but the Directors

question 28

Multiple Choice

If The Raintree Company has accumulated earnings each year but the directors have not declared dividends for five years, the shareholders may:

• A) petition a court of law for redress.
• B) override the board by a two-thirds vote.
• C) ask for an injunction requiring a dividend to be declared.
• D) do nothing but sell their stock.

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Definitions:

Negative Externalities

Costs suffered by a third party due to an economic transaction that they were not involved in, such as pollution from a factory affecting nearby residents.

Positive Externalities

Benefits that occur to a third party not directly involved in an economic transaction, leading to underproduction if not addressed.

Patent Policy

Guidelines and laws governing the protection of inventions and innovations, ensuring inventors have exclusive rights to their creations for a predetermined period.

Government Intervention

The active involvement by a government in the economic or social affairs of a country, which can include regulations, subsidies, tariffs, and public services.