How does the Revised Corporation Code address the rights to dividends?

The Revised Corporation Code clearly establishes that the issuance of dividends is primarily a decision made by the board of directors. While shareholders do have a role in the process, as they ultimately approve certain types of dividends, it is the board that determines when and how much dividend to declare. This structure provides a level of governance and financial control, ensuring that the company can manage its funds responsibly while also meeting the expectations of its shareholders.

This approach allows the board to consider the overall financial health of the corporation before making dividend declarations. They can factor in necessary reinvestments, operational needs, and future growth opportunities, ensuring that shareholders receive dividends only when it's prudent to do so. The involvement of shareholders in approving certain forms of dividends—such as preferred dividends or any extraordinary distributions—reflects their investment interests while maintaining the operational autonomy of the corporation's management.

The other choices do not align with the principles set forth by the Revised Corporation Code. For instance, treating dividend issuance as solely at the discretion of shareholders overlooks the essential role of the board in making these decisions. Automatic issuance of dividends based solely on profits disregards the company's need to manage cash flow responsibly. Finally, limiting dividends to only cumulative types ignores the various forms of dividends that can be declared,