If a Court Determines That a Manager's Corporate Decision Amounted

question 31

Multiple Choice

If a court determines that a manager's corporate decision amounted to self-dealing,

• A)the business judgment rule will not apply.
• B)the transaction being challenged will be automatically voided.
• C)the manager is automatically personally liable to the corporation.
• D)the manager will automatically be fired.

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Definitions:

New Equity Sales

New equity sales refer to the process of issuing new shares of stock to investors in order to raise capital for the corporation.

Cash Flow From Assets

The total amount of cash generated by a company’s main business operations, available for debt servicing, dividend payments, and reinvestment in the firm.

Operating Cash Flow

Operating cash flow is the cash generated from the normal operations of a business, reflecting the company's ability to generate sufficient cash to maintain and expand operations.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its liquidity and operational efficiency.