Question

45.)

What type of shareholder voting process would allow holders of 51% of the voting shares of a stock select all the board representatives?

	a.	cumulative voting
	b.	share class voting
	c.	proxy voting
	d.	straight voting

42.)

You are considering purchasing a new home. You will need to borrow $290,000 to purchase the home. A mortgage company offers you a 20-year fixed rate mortgage (240 months) at 12% APR(1% month). If you borrow the money from this mortgage company, your monthly mortgage payment will be closest to ________.

	a.	$2,445
	b.	$4,470
	c.	$3,193
	d.	$5,109

Answer 1

Answer : 42) Correct Option is $3,193.

Reason : Using PMT function of Excel

=PMT(rate,nper,pv,fv)

where rate is the rate of ineterst per period i.e 12%/12 = 1%

nper is the number of payments i.e 12 * 20 = 240

pv is the amount of mortgage i.e -290,000

fv is the future value i.e 0

=PMT(1%,240,-290000,0)

Monthly Mortgage payment is 3193

Answer : 45) Correct Option is (a.) Cumulative Voting

Reason :

Under cumulative voting a shareholder is allowed to cast all its vote to a single candidate or to different candidates as per the wish . Therefore if a shareholder has 51% of the voting shares of a stock he can cast to a single person or proportionately to all the directors. Therefore Corect Option is Cumulative Voting .