This dissertation covers the impact of minority protection on dividend policy. Majority shareholders as well as company management have the opportunity to take advantage of their position by influencing dividend distribution at the expense of minority shareholders. Legislation can be used to secure the position of minority shareholders. Scandals, such as that of Enron, have proven the necessity of this type of legislation.
In the United States, regulations such as Sarbanes Oxley (2002) seek to improve investor protection. Nonetheless, European Company Law (2001) does not include any common directives on minority protection. Therefore, minority protection has been left to the responsibility of individual countries, either through corporate governance regulations or regulations related to shareholder meetings. Usually in Europe the legislation of different countries grants investors indirect ways of influencing dividend distribution. Finnish Law grants direct influence to minorities. The law states that a preordained minority (1/10) has the right to demand at least half of the company’s profits to be shared, as long as the amount does not exceed 8 percent of their own capital.
The study examines how minority protection, such as the Finnish minority protection model, works in actuality or if the actions of the largest shareholders and company management can in fact paralyze the realization of shareholder protection.
The most central result of the study is that Finnish legislation provides minority shareholders better protection against management than majority shareholder influence. By combining characteristics of American legislation together with minority protection resembling the Finnish model, a legislation could be formed which would protect both the minority and the majority shareholders against company management in cases where management aims to limit dividend distribution.
In finance theory, dividends are believed to possess informational value for a company’s future earnings development. Another pivotal result of the study is that minority protection lessens the potential informational value of dividends. From a legislator’s perspective, minority protection should protect the minority shareholders’ right to decent dividends, but also safeguard the dividend’s informational value. When allocating capital, investors could then invest funds as productively as possible.
Leena Vuorenmaa | alfa
Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)
Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.
As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...
Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.
Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...
For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.
While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...
An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.
The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...
A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.
Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...
16.08.2017 | Event News
04.08.2017 | Event News
26.07.2017 | Event News
22.08.2017 | Physics and Astronomy
22.08.2017 | Power and Electrical Engineering
22.08.2017 | Medical Engineering