After successfully completing your corporate finance class, you feel the next ch

Question

After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only person voting for you. If Schenkel has 385,000 shares outstanding, and the stock currently sells for $42, how much will it cost you to buy a seat if the company uses straight voting?

After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only person voting for you. If Schenkel has 385,000 shares outstanding, and the stock currently sells for $42, how much will it cost you to buy a seat if the company uses straight voting?

Explanation / Answer

Shares needed = (385,000 shares / 2) + 1

Shares needed = 192501

And the total cost to you will be the shares needed times the price per share, or:

Total cost = $192501*42

Total cost = $808,5042

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