If the Board of Directors Refuses the Shareholder's Demand Because

question 50

Multiple Choice

If the board of directors refuses the shareholder's demand because it reasonably believes it would be improper to bring a lawsuit,the board of directors are protected:

• A)from joint and several liability.
• B)by indemnification.
• C)from a court piercing the corporate veil.
• D)by the business judgment rule.

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Definitions:

Cost of Goods Sold

Expenditures directly resulting from the manufacturing of a company’s products for sale, comprising materials and employee wages.

Merchandise Inventory

Items purchased by a company for the purpose of being sold to customers; considered a current asset on the balance sheet.

Accounts Payable

Money owed by a company to its creditors for goods or services that have been received but not yet paid for.