The __________ Precludes Imposing Liability on Directors and Officers for Honest

question 25

Multiple Choice

The __________ precludes imposing liability on directors and officers for honest mistakes in judgment if they act with due care, in good faith, and in a manner reasonably believed to be in the best interests of the corporation.

• A) duty of diligence.
• B) duty of obedience.
• C) business judgment rule.
• D) None of these is correct.

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash and goods, used to generate wealth through investment.

Labor

Labor refers to the human effort, both physical and mental, used to produce goods and services.

Close Substitutes

Goods or services that can be used in place of each other with relative ease by consumers, based on similar features, functions, or effects.

Elastic

In economics, elasticity refers to the degree to which demand or supply responds to changes in price. High elasticity means a significant change in quantity with a small change in price.