What Is a Derivative Action

question 10

Multiple Choice

What is a derivative action?

• A) It is a lawsuit brought on behalf of the corporation by a shareholder when the directors refuse to act.
• B) It is a right of shareholders to protect dilution of their percentage of share ownership.
• C) It is an agreement made in advance among shareholders to vote in a particular manner.
• D) It is a shareholder voting method permitting the holder to distribute his total votes in any manner that he chooses-all for one candidate or several shares for different candidates.
• E) It is a doctrine holding that certain legal consequences attach to an attempt by a corporation to carry out acts that are outside its lawful powers.

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Definitions:

Planned Economies

Economic systems where government agencies centrally plan and direct all major economic activities, assigning resources and determining outputs with the aim of achieving specific goals.

U.S. Firms

Companies or businesses that are registered, operate, or have their headquarters in the United States.

Bankrupt

A legal status of a person or entity that cannot repay debts to creditors and is thus subject to specific legal processes.

Life Expectancy

The average number of years an individual is expected to live, based on current mortality rates.