Brice Is on the Board of ABC Corporation

question 50

Multiple Choice

Brice is on the board of ABC Corporation.XYZ Corporation has made a move to acquire ABC.Tina,the president of ABC advises the board that the offer made by XYZ is a good one that should be accepted.She did not disclose,however,that XYZ had offered her a generous bonus if she could convince the board members of ABC to take XYZ's offer.Brice tells the other board members that they should simply rely on Tina because she is probably right,and under the business judgment rule they are protected even if she is wrong.Which of the following is true regarding Brice's advice?

• A) Brice is correct.
• B) Brice is correct only if the directors of Success had been soliciting offers, and Tina was charged with reviewing them.
• C) Brice is incorrect unless it can be established that Tina has prior experience in mergers and acquisitions.
• D) Brice is incorrect because no statement made by an officer is entitled to blind reliance.

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Definitions:

Unintended Consequences

Outcomes that are not the ones foreseen or intended by a purposeful action.

Domestic Clothing Factories

Factories located within a country's borders that manufacture clothing and apparel for local consumption or export.

Overseas Operations

Business activities or processes conducted in foreign countries outside of a company's home country.

Corporate Tax Relief

Measures or policies designed to reduce the tax burden on corporations, potentially to stimulate investment or economic activity.