Roth and Starr are shareholders of Triumph Hotel Corporation.Triumph's directors fail to declare a dividend.Roth and Starr could succeed in asking a court to order the directors to meet and declare a dividend

Question

Quizplus · Accepted Answer

Shareholders have limited rights to force a corporation to declare a dividend, but one of the ways they can succeed is by showing that the directors' decision to withhold a dividend is an abuse of their discretion. If the directors have acted reasonably and in good faith, a court is unlikely to interfere with their decision. The availability of earnings or cash reserves is not necessarily the determining factor.

Roth and Starr Are Shareholders of Triumph Hotel Corporation