Expropriation of Minority Shareholders Means That Minority Shareholders

question 19

Multiple Choice

Expropriation of minority shareholders means that minority shareholders

• A) must sell their shares upon demand.
• B) cannot own shares in foreign firms.
• C) do not receive dividends.
• D) are adversely affected by the actions of controlling shareholders.

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Definitions:

Tax Shield

A reduction in taxable income for an individual or corporation achieved through claiming allowable deductions such as mortgage interest, medical expenses, or depreciation.

Bankruptcy Costs

Expenses associated with the process of declaring bankruptcy, including legal, administrative, and direct costs.

Modigliani

Franco Modigliani, an economist known for his work in corporate finance, especially the Modigliani-Miller theorem regarding capital structure and the dividend irrelevance theory.

Miller

Often refers to a person who operates a mill, a machine to grind a cereal crop to make flour.