1. Wal-Mart has had several stock splits. Its stock price is hovering around $50 per share. Berkshire Hathaway, led by Warren Buffet, does not split its stock. Its price has been near $100,000 per share. What are some reasons why Wal-Mart would split its stock and Berkshire Hathaway chooses not to do so?
2. Roland Astute, a shareholder of Steamroller Corporation, uncovered evidence that, in his opinion, showed that the corporation's treasurer was embezzling corporate funds. Uncertain of whether the corporation's board of directors would agree with his assessment of what the evidence showed, Astute did not discuss the matter with the board or with other shareholders. After conferring with his attorney, Astute filed a derivative suit against the treasurer, in an attempt to recover for the losses the treasurer's actions had caused the corporation to experience. Under the circumstances, is Astute's derivative suit properly before the court? Explain.
3. Describe the ways that a person can become a shareholder of a company.
4. Nancy owns shares in ExxonMobil. Describe the MBCA requirements of notice concerning shareholder meetings.
5. Why do you think that Delaware's corporation laws now permit remote communication? What are the requirements for a remote participation meeting?
Case Problem
John R. Dyer owns approximately 6 percent of the stock in the Indium Corporation. All of the remaining outstanding shares are owned by the corporation's chief executive officer and chair of its board of directors. Suspecting that the corporation was improperly retaining income otherwise payable to him, Dyer sought to inspect its books and records. He was provided the minutes of its share-holders and board of directors meetings, but otherwise rebuffed in his requests for records. Instead, the chief executive officer offered to purchase Dyer's shares. Dyer sued, demanding inspection of the records that his accountant deemed necessary in order to determine the value of his shares. Should Dyer be given a right to inspect the corporate records? Explain.