Question

If there are 10 directors to be elected and a shareholder owns 250 shares, calculate the maximum number of votes that he or she can cast for a favorite candidate under each of the voting methods.

a. majority voting

b. cumulative voting

Answer 1

Majority voting is a type of voting right is where shareholders are granted one vote for each director's position for each share held. Therefore in the given question a shareholder holds 250 shares, so he is eligible for 250 votes to each director. If there is single favourite candidate he can give a maximum of 250 votes only.

Cumulative voting is a type of voting right is where a shareholder has votez that are equal to the number of shares multiplied by the number of positions the shareholders are voting. the shareholder can opt to vote the entire votes to a single director. Here a shareholder holds 250 shares and 10 director positions, so he gets total of 2,500 votes. He can cast his entire 2500 votes to his single favorite candidate.