AstroStar Inc

question 39

Essay

AstroStar Inc.'s board of directors consists of three members-Eckhart, Dolan, and Macero. At a regular board meeting, the board selects Galiard as president of the corporation. Later, an audit reveals that during his term as president he has openly embezzled $500,000 from AstroStar. The same audit reveals that the board knew when it selected Galiard that he had been previously convicted of embezzlement. Can the corporation hold directors Eckhart, Dolan, and Macero personally liable?

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Definitions:

Producer Surplus

The profit producers make over and above the minimum amount they would be willing to accept for selling their goods or services.

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.

Equilibrium Price

The cost where the supply of goods meets the demand for those goods.

Tax Revenues

The funds collected by governments through the process of levying taxes.