Which One of the Following Is an Example of Breach

question 132

Multiple Choice

Which one of the following is an example of breach of fiduciary duty?

• A) The directors refused to declare a dividend, contrary to the request by its preferred shareholders.
• B) A shareholder owning 2% of the outstanding shares started a business in direct competition with the corporation in which he held shares.
• C) An officer of the corporation learned of a business opportunity intended for the corporation and intercepted it for his own benefit.
• D) The directors of the corporation refuse to give a pay raise to the employees although they had not received a pay raise for five years.
• E) A director profited $120,000 from a contract between the corporation and a firm in which he had an interest after he made full disclosure of his interest to the board of directors and abstained from the vote on the contract.

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Definitions:

Excess Demand

Occurs when the quantity demanded of a product significantly exceeds its quantity supplied, often leading to a shortage.

Equilibrium Price

The price at which the quantity of a good or service supplied matches the quantity demanded, resulting in market stability.

Output

The total amount of goods or services produced by a business, industry, or economy.

Economic Efficiency

A situation where resources are utilized in the most optimal manner, producing the desired output with minimum waste or expense.