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  3. the directors of ghp ltd ask you to advise them...

Question: the directors of ghp ltd ask you to advise them...

Question details

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?

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