You are a Director $($a$.$k$.$a$.$ a Fiduciary$)$ of Facebook. Zuckerberg, after flying to and from space on his Blue Origin Rocket he purchased from Jef Bezos, decided he needed more money to buy a few more Blue Origin Rockets but in different colors. He approaches you and the rest of the Board of Directors with a proposal: Zuckerberg wants to issue new equity to himself and each Director. This would reduce the value of all of the shareholders' stock, but it would make Zuckerberg and all of the Directors several billion dollars. Should you vote to approve his proposal?

Question $10$Answer

a$.$

Yes, because you could also buy a Blue Origin Rocket with this new cash and go to space.

b$.$

Yes, because, under the Business Judgment Rule, you are able to use your best judgment to approve this proposal.

c$.$

No$,$ because negatively impacting the shareholders and decreasing the value of their stock for the benefit of Zuckerberg and the Directors is a violation of the Duty of Loyalty and Duty of Care.

d$.$

No$,$ because issuing new equity is inconsistent with the Certificate of Incorporation.

e$.$

None of these.