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Ch 40 #2 Corporations Shareholders discussion

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Q In section 40-4 of the chapter, the text lists Dividends as a shareholder "right". 1) What is a dividend? 2) Who decides whether the corporation shall distribute a dividend? 3) Can you describe circumstances where a dividend would not be allowed

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1) When there is a distribution made of the profits which are provided to the shareholders, it is known as dividend. The dividend is earned by the shareholders by making investments. 2) The decision whether the corporation shall distribute a dividend or not is made by the Board of Directors.