The business judgment rule is applicable only if the directors make an informed decision.

Question

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The business judgment rule presumes that a company's board of directors act in good faith, with due care, and in the best interest of the company. However, this presumption is only applicable if the directors make an informed decision based on all relevant information available to them at the time. If the decision is based on incomplete or misleading information, the business judgment rule may not apply.

The Business Judgment Rule Is Applicable Only If the Directors