To Obtain the Protection of the Business Judgment Rule,a Director

question 23

Multiple Choice

To obtain the protection of the business judgment rule,a director must meet certain requirements in arriving at his/her decisions.He/she must:

• A)make an informed decision; be free from conflicts of interest; and must have a rational basis for believing that the decision is in the best interests of the corporation.
• B)make a subjectively rational decision that is based on a cost benefit analysis.
• C)make an informed decision that promised to make the corporation a substantial profit; the decision need not be objectively rational,only subjectively rational.
• D)use the court's business judgment for all of the corporation's matters.

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Definitions:

Excessive Rate

A rate that is significantly higher than what is considered normal or acceptable.

Depth of Breathing

Refers to the extent of thoracic expansion and diaphragm movement during inhalation, affecting the volume of air taken into the lungs.

Celsius

A temperature scale where water turns to ice at 0 degrees and reaches boiling point at 100 degrees, given normal atmospheric conditions.

Fahrenheit

A scale of temperature where water freezes at 32 degrees and boils at 212 degrees under standard conditions.