Elroy Was the Controlling Shareholder and Sole Director of Maxi-Screen

question 8

Multiple Choice

Elroy was the controlling shareholder and sole director of Maxi-Screen Ltd, which carries on a film production business.His wife, Ann, is a minority shareholder.The corporation was incorporated in 1995 and has paid a substantial dividend each year to its shareholders.In 2009, Ann and Elroy separated.Elroy did not declare a dividend even though the business was more profitable than ever because he did not want to share the profits with Ann.Which of the following statements best reflects Ann's legal position?

• A)She has no remedy because the declaration of dividends is a matter within the discretion of the directors.
• B)She has no remedy because Elroy is the controlling shareholder and can do what he wants.
• C)She could seek relief in court on the basis that Elroy and the corporation have defeated her reasonable expectations as a shareholder and thereby oppressed her or unfairly disregarded or prejudiced her interests as a shareholder.
• D)The only way she could seek relief is to apply to the court for permission to bring a derivative action against Elroy on behalf of the corporation for breaching his fiduciary duty.
• E)She has no remedy because the failure to pay dividends is not an action that she can dissent from.

Analyze scenarios to determine the most appropriate pricing strategy based on company and customer location.

Understand the implications of FOB (Free on Board) terms on shipping responsibilities and costs.

Recognize the role of government regulation in preventing unfair pricing practices such as price fixing and price discrimination.

Identify and evaluate the impacts of pricing decisions on both buyers and sellers in different geographical locations.

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Definitions:

Credits

Accounting entries that increase liabilities or decrease assets, representing the opposite of debits in the double-entry bookkeeping system.

Highly Leveraged

Describes a company or investment that has a high level of debt relative to equity, indicating a potentially higher risk and return profile.

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest.

Financial Leverage

Financial leverage describes the use of borrowed funds to increase the potential return of an investment.