While at Home,Kyle Kinston,the President and CEO of Remstat,Inc

question 66

Multiple Choice

While at home,Kyle Kinston,the president and CEO of Remstat,Inc.is called by the CEO of Viokam Corporation,who asks Kinston if Remstat would be interested in buying about 25 percent of the outstanding shares of Viokam.Remstat is a billion-dollar conglomerate that has contemplated acquiring Viokam for some time,but Kinston tells Viokam's CEO that Remstat is not interested.Kinston tells the CEO,however,that KKIM,Inc.is willing to buy the shares.Kinston is the 100 percent shareholder of KKIM.Viokam sells the shares to KKIM for $35 million.A year later,KKIM sells the shares for $55 million to a mutual fund company.When Remstat's directors discover KKIM's purchase and sale of the Viokam shares,they sue Kinston on behalf of the corporation.Which of the following is correct?

• A)Kinston has exceeded her authority to act for the corporation.
• B)Kinston has self-dealt with the corporation.
• C)Kinston has done nothing wrong.
• D)Kinston has usurped a corporate opportunity.

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Definitions:

Long Run

A period where all inputs or factors of production can be varied, allowing full adjustment to changes in the market or economy.

Short Run

A period in economics where at least one input is fixed and cannot be changed by the firm.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand dynamics.

Units

Basic measurement or quantity of a product, used to track inventory, production, and sales in various contexts.