Question: the directors of ghp ltd ask you to advise them...
The directors of GHP Ltd. ask you to advise them in the following situation:
The directors consider that they should invest profits into purchasing capital equipment, rather than declaring a dividend.
a) The shareholders are unhappy and the directors wish to know whether a court is likely to interfere with their discretion not to declare a dividend.
b) In addition, you should advise what the possible practical consequences are for the directors if they adopt a meagre dividend policy?