Blue Moon Corporation has one million shares of common stock outstanding. In a t

Question

Blue Moon Corporation has one million shares of common stock outstanding.  In a typical annual election for the board of directors, shareholders representing 70 percent of the shares outstanding exercise their right to vote.  The company has nine members on its board of directors, all of whom are elected annually.

a. if the company uses a majority voting procedure to elect its board, how many votes are required to elect

                i. One director

                ii. Two directors

                iii. A majority of the members of the board of directors

b. if the company uses a cumulative voting procedure, how many votes are required to elect

                i. One director

                ii. Two directors

                iii. A majority of the members of the board of directors

Explanation / Answer

a. Number of votes cast = 0.7 x 1,000,000 = 700,000 i. 350,000 + 1 ii. 350,000 +1 iii. 350,000 +1 b. i. Number of shares = [(1) x (700,000)] / [(9) + 1] + 1 = 70,001 ii. Number of shares = [(2) x (700,000)] / [(9) + 1] + 1 = 140,001 iii. Number of shares = [(5) x (700,000)] / [(9) + 1] + 1 = 350,001

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