Suppose a firm has 15.4 million shares of common stock outstanding and six candi
ID: 2642074 • Letter: S
Question
Suppose a firm has 15.4 million shares of common stock outstanding and six candidates are up for election to three seats on the board of directors.
If the firm uses cumulative voting to elect its board, what is the minimum number of shares needed to ensure election to the board?
If the firm uses straight voting to elect its board, what is the minimum number of votes needed to ensure election to the board?
Suppose a firm has 15.4 million shares of common stock outstanding and six candidates are up for election to three seats on the board of directors.
Explanation / Answer
Answer:
1. Cumulative voting method is a type of corporate voting right in which a stockholder receives one vote per owned share times the number of directors' positions up for election.
Total Number of votes = 15.4 Million shares *6 = 92.4 Million Votes
Minimum Votes required = 92.4*51% = 47.12 Million
2. Straight voting
Total Number of votes = 15.4 Million
Minimum Votes required = 15.4*51% = 7.85 Million
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