Lucas purchased 250 shares of Marshall Manufacturing last year but was not paid dividends. He now is going to hire an attorney to sue the company for failure to pay dividends. If he follows through with his plan, Lucas will probably win the lawsuit because companies are obligated to pay their stockholders dividends for owning and holding the firm's stock.

Question

Quizplus · Accepted Answer

Although companies will offer shareholders dividends if they have earnings after taxes, they are under no legal obligation to pay dividends. High-growth companies will often retain their earnings and further expand the business.

Lucas Purchased 250 Shares of Marshall Manufacturing Last Year but Was