Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Law
Shareholder Dividend Options, Zohar Goshen
Shareholder Dividend Options, Zohar Goshen
Faculty Scholarship
This Article proposes a legal norm that shifts discretion over dividend policy from managers to the capital markets (i.e., shareholders). State corporate law could effect such a shift by adopting a rule that mandates shareholder control over the dividend decision. The rule would require every firm to adopt an option mechanism that, at predetermined dates, provided each of the firm's shareholders with the right to select either cash or stock dividends in an amount equal to the shareholder's pro rata share of the firm's earnings. For instance, the law might require that, once a year, the firm offer to each …