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Michelson was chairman of the board and chief executive officer of a computer manufacturing firm. When considering whether to purchase CompuPrint, the manufacturer of computer printers, Michelson examined CompuPrint’s financial records, consulted with legal and financial experts, and conducted an in-depth study of the marketplace and decided that it would be profitable for his corporation to purchase CompuPrint. If CompuPrint turns out to be a poor investment, and a court hears a case challenging Michelson’s decision, the court will most likely analyze his conduct based on the ____________ rule.

Koto, a successful accountant, has been invited to join the board of directors of Big Corp. Koto is concerned that she will face personal liability for her decisions while on the board of Big. Big Corp. can limit Koto’s liability at this point in time by including:

Linda, a manager and a currency trader for United Traders, has specific instructions from the CEO not to take a position on any currency in excess of $1 million. Linda sees what she believes to be a sure thing and takes a $20 million position. Unfortunately, the transaction goes bad and costs United $60 million. Does Linda have any liability to United? 

When shareholders join together in a temporary arrangement, it is called a:

EA Games Industries is a manufacturer of home video game machines and home video games. Johnson Department Store wants to market the home video games, but EA refuses to sell the games unless Johnson also agrees to purchase the home video machines. A court will most likely find such a restriction to be a(n):

____________ elect the ____________, who take whatever actions are appropriate and in the best interests of the corporation.

A ____________ is defined as a coalition of individual outsiders who do not necessarily own stock, but can be affected by corporate decision making.

____________ occurs when a targeted corporation makes a deal with the suitor to protect management of the target.

To submit a shareholder proposal, a shareholder must have owned (for the past year) __________ percent or __________ in market value of the voting stock of the corporation.

Question 14 The following are denied (prohibited) powers to the states except