What is the rule the board must follow to make this decision

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Reference no: EM131783265

You and three of your friends have started a closely held corporation (this means that the stock is NOT publically traded, and never will be). The corporation after its first year in business after paying all of its bills has made a profit of 100,000.

You and your friends are the four shareholders, all of you are also on the board of directors and each of you is an officer in the corporation – you are the CEO.

The board is meeting to decide whether or not to declare a dividend to the shareholders. What is the rule the board must follow to make this decision? What factors (specific facts, not some generic statements) must you look at to decide whether or not to declare a dividend and how much that dividend amount might be? Explain fully.

The board is also meeting to decide whether or not to give you a raise. May you participate in that decision? Why or why not? Explain.

What specific factors (again no generic statements) must the board look at to decide whether to give you a raise – some of the same factors used in (a) will apply, but there are some additional factors to look at and consider.

Reference no: EM131783265

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