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arsen [322]
3 years ago
11

An appraiser valued a subsidiary of Signal Co. at between $230 million and $260 million. One month later, Burmah Oil offered to

buy the subsidiary at $480 million, giving Signal only three days to respond. The board of directors accepted the offer without obtaining an updated valuation of the subsidiary or determining if other companies would offer a higher price. Members of the board were sophisticated, with a great deal of experience in the oil industry. A Signal Co. shareholder sued to prevent the sale. Is the Signal board protected by the business judgment rule?
Business
1 answer:
Goshia [24]3 years ago
8 0

Answer:

No, because they violated the duty of care

Explanation:

Business judgement rule is a provision that protects the management of a business from frivolous legal action concerning the way it does business.

The court assumes that the management acts in good faith in its fiduciary role, standard of loyalty, prudence, and care.

Duty of care is breached when the management do not make reasonable effort to prevent injury or loss.

In this instance Signal board is not protected by the business judgement rule because they violated duty of care.

Although the offer by Burmah oil is above the valuation a month ago, the board did not bother to do a present valuation or find out if other companies want to buy the subsidiary at a higher price.

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Andre45 [30]

Answer:

Break-even point in unit = 250 units

Explanation:

Given:

Fixed cost = $500

Variable cost = $2

Number of customer = 325

Sales amount = $4

Find:

Break-even point

Computation:

Break-even point in unit = Fixed cost / (SP - VC)

Break-even point in unit = 500 / ($4 - $2)

Break-even point in unit = 250 units

4 0
3 years ago
Jogging gear is considering a project with an initial cash requirement of $238,400. the project will yield cash flows of $4,930
natta225 [31]
First, we need to calculate for the total return of the project by multiplying 4,930 by 65. Doing so will give us an answer of $320,450. Then, we calculate the rate of return as shown below.
                     rate of return = ($320,450 / $238,400) x 100% 
                                             = 134.42%
Thus, the rate of return of the said project is approximately 134.42%. 
7 0
2 years ago
Your portfolio is 230 shares of Barden, Inc. The stock currently sells for $93 per share. The company has announced a dividend o
Ipatiy [6.2K]

Answer:

Your stock will be valued in $20,838.

Explanation:

If there are no taxes, it is expected that the value of the stock will lower the amount of the dividend. That means

Stock price (April 19) = stock price - dividend = 93-2.4=90.6 $/share

In this case, your stock of 230 shares will be valued as

Stock value = Stock share * stock price = 230 shares * $90.6/share

Stock value = $ 20,838

Your stock will be valued in $20,838.

6 0
3 years ago
Imagine that two goods are available to you: servants (X) and robots (Y). You like servants three times as much as robots. If yo
Andrej [43]

Answer: 3

Explanation:

The marginal rate of substitution simply means the rate at which one good will be exchanged for another good based on the current market price.

Since you like servants three times as much as robots, this implies that the utility that one gets from one servant is exactly like the utility that will be gotten from three robots.

Therefore, the utility function will be:

U = 3X + Y

Then, the marginal rate of substitution will be:

= MUX/MUY

= 3

4 0
3 years ago
An acre lot was purchased for $100,000. A $500,000 office building was erected. The building is placed in service in May. Find t
kolezko [41]

Answer: $8025

Explanation:

From the information given, first and foremost, we need to realise that only the building in this case will be depreciated due to the fact that land is considered to be a non depreciable asset.

Therefore, the MACRS depreciation charge for year 1 will then be:

= MACRS rate × Value of Building

= 1.605% × $500,000

= 0.01605 × $500,000

= $8025

5 0
3 years ago
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