Far Afield Inc

question 7

Multiple Choice

Far Afield Inc.announces its intent to acquire Eversmall Company.Despite this announcement,Eversmall's directors do not prepare for a buyout-they do not determine a price or seek out other buyers,and negotiate with Far Afield for only a short time.Former Eversmall shareholders allege that the directors breached their fiduciary duties.The directors' best defense is

• A)the right to indemnification
• B)the business judgment rule.
• C)the shareholders' preemptive rights.
• D)the limited liability of the corporation.

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Definitions:

Question of Fact

An issue to be decided by the jury or judge regarding the reality of events or existence of facts in a trial.

Question of Law

A point concerning the interpretation or application of laws, as opposed to questions of fact in legal cases.

Standard of Proof

The level of certainty and the degree of evidence necessary for a judge or jury to make a decision in a legal case.

Criminal Matter

A legal case or issue that involves violations of laws that protect the public welfare and are enforced by the state.