Furman Nutrients Inc. is a producer of food additives for commercial and consumer use. It is dominant in its field for a number of food additives, including MSG, ETDA, lactic acid, and caramel. For each of the last 30 years, Furman has paid a quarterly dividend to its common shareholders. The annual dividend amount has averaged between 3 and 5 percent of the market price of Furman’s common shares. Furman’s board of directors decides to reduce the common dividend by 50 percent for the next three years, to about onehalf percent of the market price of Furman’s common shares. The board wants to use the cash savings to increase Furman’s research and development budget as Furman attempts to identify, develop, and produce food additives that are “more natural” and meet the “health needs and interests of our industrial and consumer users.” Reducing the common share dividend will result in Furman retaining an additional $955 million of earnings and cash over a two-year period. Furman currently has retained earnings of $1.47 billion and cash of $1.26 billion. Its earnings average $610 million annually. Furman expects to spend about an additional $1.17 billion on R&D in the next four years. The board believes that the R&D expenditures will allow Furman to maintain its leadership position in the industry and maintain or increase profits in the long run, a decision backed by a report by Furman’s outside financial consultants. Furman’s minority shareholders sue to force the board of directors to declare a larger dividend. Will their action be successful?