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1961] COMMENTS 431 if they are, their effect on actual corporate practice must not be overestimated. For instance, the provisions of the bill regarding the valuation of corporate assets and liabilities will still permit corporations to conceal their true earn ings (and thereby prevent an accurate determination of their earning power). Also the new right of the shareholders meeting to dispose of a sub stantial part of the corporate earnings will generally not result in substan tially higher dividends. The managements of various large German corpora tions have for some time voluntarily submitted their financial statements to the shareholders' meeting for approval and never have had any difficulty in getting this approval by large majorities. The average shareholder, for lack of sufficient experience in the field of corporate finance, usually has little choice but to follow the recommendations of his management. Furthermore, there does not seem to be a real need for dividend increases. According to statistical data collected by a government agency, the average German AG distributes, at present, about 50% of its taxable earnings as dividends to its shareholders —a ratio which can be considered as fair, even by American standards. BERNHARD V. FALKENHAUSENf ERNST C. STEEFEL*
American Journal of Comparative Law – Oxford University Press
Published: Oct 1, 1961
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