Use the Fact Situation in Q1 to Answer the Related

question 28

Multiple Choice

Use the fact situation in Q1 to answer the related question that follows. In this situation,assuming the company is an Ontario company,the best argument of A,B,and C in their defence of the lawsuit under both federal and Ontario legislation is that

• A)on behalf of the shareholders of the company,they exercised reasonable diligence in assessing the value of Gladstone Inc.
• B)the shareholders have no cause of action against them as any duty is owed to the company only.
• C)they committed no breach of fiduciary duty to Multi Corp Ltd.
• D)they committed no breach of fiduciary duty to the shareholders of Multi Corp Ltd.
• E)on behalf of the company,they exercised reasonable diligence in assessing the value of Gladstone Inc.

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Definitions:

Effective Interest

The real cost of borrowing or the actual interest rate earned, considering compounding and fees.

Amortize Discount

The gradual reduction of a bond discount over the life of the bond, expensed as interest over the period.

Straight-Line Method

The Straight-Line Method is a way of calculating depreciation of an asset, where the asset's cost is evenly spread over its useful life.

Other Than Temporary

Classification of impairments or losses indicating that the reduction in value is not expected to reverse in the near future.