Question

An election is being held to fill four seats on the board of directors of a firm in which you hold stock. The company has 8,600 shares outstanding. If the election is conducted under cumulative voting and you own 470 shares, how many more shares must you buy to be assured of earning a seat on the board? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  

New shares to purchase

shares

Answer 1

X = [S*N/(D+1)] + 1

Where,

X = number of shares needed to elect a given number of directors

S = Total number of shares at the meeting = 8600

N = number of directors needed = 1

D = total number of directors to be elected = 4

So,

X = [8600* 1/ (4 + 1)] + 1

   = [8600/ 5] + 1

      = 1720 + 1

      = 1721

You need to have 1721 share to get a seat.

SO you have already own 470 shares, so you will need (1721 - 470 = 1251) more share

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