Question

Suppose a firm has 15.1 million shares of common stock outstanding and eight candidates are up for election to four seats on the board of directors.

   

a.	If the firm uses cumulative voting to elect its board, what is the minimum number of votes needed to ensure election of one member to the board?

   

Minimum number of votes

   

b.	If the firm uses straight voting to elect its board, what is the minimum number of votes needed to ensure election of one member to the board?

    

Minimum number of votes

Answer 1

HI

In cumulative voting each member can cast all of its votes to a single candidate.

Total number of shares = 15.1 million

number of seats = 4

a) For cumulative voting total available votes = 15.1*4 = 60.4 million

minimum number of votes needed = (total available votes/(number of seats+1))+1

=60,400,000/(4+1) +1

=12,080,001 votes

b) For straight voting, total number of shares available =15.1 million

minimum number of votes needed to elect one candidate = 15,100,000//2 +1

=7,550,001

Thanks