Question

Suppose a firm has 16.6 million shares of common stock outstanding and eight candidates are up for election to four seats on the board of directors.

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?

Answer 1

In straight voting election, each share is entitled to one vote. The directors who takes a majority vote wins. If one director is to be chosen, each shareholder can vote as many times as it has number of shares. The same rule applies to more than one director sets as they are mutually exclusive.

So, in this case,

any of the four directors would win if they fetch the majority of votes i.e more than 50% of the total votes. So, one can will by simple 50.1% of the total votes and one would loose by 49.9% of the votes. So. the total number of votes to win in this case would be:

50.1% of 16.6 million shares

= .501*16.6 million shares

=8.3166 million shares

NOTE: This is the minimum number of shares required to win and not the fixed number to win.

Kindly give a thumbsup of you found the answer helpful.