Using the familiar economic model of the firm, I show that shareholders have no special claim on a corporation's economic returns. No one has an entitlement to economic rents in a capitalist system. Shareholders, the purely fungible providers of a purely fungible commodity, are particularly...

Everyone knows that shares receive dividends because they are entitled to the residual returns of a public corporation. Everyone is wrong. Basic principles of market competition, applied to the actual law of corporations, sharply contradict the conventional wisdom. First, shareholders are not...