Answer:
they set up a committee to establish a procedure for making decisions that are in the best interests of the corporation.
Explanation:
The business judgment rule provides corporate officers and directors protection when they set up a committee to establish a procedure for making decisions that are in the best interests of the corporation.
Generally, the business judgment rule is a legal principle that primarily protect the board of directors from breach of fiduciary duty liability, in as much as the directors acted in good faith of the shareholders and ensuring a logical and well informed decision-making process.
The fiduciary duty liability of the corporate officers and directors of an organization to its shareholders are duty of loyalty, care, prudence, which implies, they'll always make the interest of the corporation and its shareholders a high level priority.
Hence, the business judgment rule is aimed at protecting and mitigating the risks faced by corporate officers and directors in the event of litigations because it is assumed that they're acting in the interest or favor of the corporation and its shareholders.
To get the growth rate, we will follow the Gordon Growth modelP= D/(K-G)whereP= stock value=$68D= Expected dividend=$3.85G= Growth rateK= required rate of returnG =K-(D/P)Substitute the given valuesG= 0.11-(3.85/68)
G= 5.34%The growth rate for stock required is 5.34%
Answer:
Book value= $206,400
Explanation:
Giving the following information:
The equipment cost $300,000 and had an expected salvage value of $40,000.
First, we need to calculate the accumulated depreciation:
Annual depreciation= 2*[(book value)/estimated life (years)]
Year 1= 2*[(300,000 - 40,000)/10]= 52,000
Year 2= 2*[(260,000 - 52,000)/10]= 41,600
Book value= purchase price - accumulated depreciation
Book value= 300,000 - 93,600= $206,400
I agree with the person above
