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:

Equity Multiplier

A financial ratio that measures a company's total assets financed by its shareholders' equity, indicating leverage level.

Return On Equity

A measure of a corporation's profitability, indicating how much profit a company generates with the money shareholders have invested.

Debt-Equity Ratio

A measure that indicates the balance between equity contributed by shareholders and debt employed to finance company assets.

Return On Equity

A gauge of corporate profitability that indicates the profit made from the investments of its shareholders.