​Elise Is a Director for Fro-Yo Inc

question 27

Multiple Choice

​Elise is a director for Fro-Yo Inc. Elise is also a director for Gelato Ice, Inc. When Fro-Yo's board considers a contract with Gelato, Elise must

• A) ​resign from Fro-Yo or Gelato.
• B) ​resign from Fro-Yo and Gelato.
• C) ​make a full disclosure of any conflict of interest.
• D) ​use her business judgment to rule on the deal.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.

Return on Investment

A measure of the profitability and efficiency of an investment, calculated by dividing the gain from the investment by its cost.

EDGAR

The Electronic Data Gathering, Analysis, and Retrieval system used by the United States Securities and Exchange Commission (SEC) for the submission of corporate filings.

FINRA

The Financial Industry Regulatory Authority, a non-governmental organization that regulates member brokerage firms and exchange markets in the United States.