Question

Everson Importers has 1,500 shares of common stock outstanding of which Dino owns 500 shares. The company has 3 open seats on the board of directors. Dino wishes to be elected to the board but realizes that no one else will vote for him. To guarantee his election, Dino will have to own ___ of 1,500 plus 1 of the shares if the firm uses voting versus owning ___ of 1,500 plus 1 of the shares if the firm uses cumulative voting

Answer 1

To guarantee his election, Dino will have to own (half or 0.5 or 1/2) of 1,500 plus 1 of the shares if the firm uses voting versus owning (quarter or 0.25 or 1/4) of 1,500 plus 1 of the shares if the firm uses cumulative voting

1.
=number of shares/2+1
=1500/2+1

=751

2.

=1*1500/(3+1)+1
=376.00