If Eilene, a Shareholder, Sues in a Derivative Suit, the Judgment

question 34

Multiple Choice

If Eilene, a shareholder, sues in a derivative suit, the judgment will be paid to:

• A) the shareholders as a dividend.
• B) Eilene directly.
• C) the corporate treasury.
• D) the board of directors.

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Definitions:

Option Contract

A contract granting one the right, but not the obligation, to buy or sell an asset at a predetermined price within a specific timeframe.

Implied-in-Fact Contract

An implied-in-fact contract is an agreement that is not expressed in words but is inferred from the actions or conduct of the parties involved.

Original Agreement

The initial contract or understanding reached between parties, before any amendments, modifications, or terminations.

Automatically Terminated

Refers to a condition in contracts or agreements where certain actions or failures to act result in the termination of the agreement without the need for further legal action.