§ 517. How net earnings credited for dividend purposes, credits to
surplus fund and to undivided profits, dividends to stockholders. When
the net earnings of an investment company having preferred shares issued
and outstanding have been determined at the close of a dividend period,
if the surplus fund does not equal twenty per centum of the investment
company's capital, one-tenth of such net earnings shall be credited to
the surplus fund, or so much thereof, less than one-tenth, as will make
such fund equal twenty per centum of such capital. The balance of such
net earnings, or the entire amount thereof if such fund equals such
twenty per centum, may be credited to the investment company's profit
and loss account; or, if its expenses and losses for such dividend
period exceed its gross earnings, such excess shall be charged to its
profit and loss account. The credit balance of such account shall
constitute the undivided profits at the close of such dividend period,
which undivided profits shall be available for dividends.

The directors of any investment company may annually, semi-annually or
quarterly, but not more frequently, declare such dividends as they shall
judge expedient from such undivided profits; provided, however, that the
directors of any such company may declare a dividend in the last month
of the fiscal year of such company, in lieu of any other semi-annual or
quarterly declaration in the same fiscal year. No investment company
shall declare any dividends to its stockholders until it shall have made
good any existing impairment of its capital and any existing
encroachment on its reserves required to be maintained against deposits.