There is an election being held to ﬁll two seats on the board of directors of a ﬁrm in which you hold stock. There are a total of 420 shares outstanding. If the election is conducted under cumulative
Voting and you own 120 shares, how many more shares must you buy to be assured of earning a
Seat on the board?

Question

Quizplus · Accepted Answer

Under cumulative voting, shareholders can cast all of their votes for a single candidate, or divide them up among the candidates as they choose. To assure a seat on the board, a shareholder must earn more votes than any other candidate.

In this case, there are two seats to be filled and a total of 420 shares outstanding. To determine how many votes are needed to secure a seat, we need to calculate the total number of votes in the election.

Total votes = Total shares x Number of seats to be filled 
Total votes = 420 x 2 
Total votes = 840

Since we own 120 shares, we can cast 240 votes (120 shares x 2 seats) in total. To secure a seat, we need to earn more than 50% of the total votes.

50% of 840 votes = 420 votes

Since we can cast up to 240 votes, we need to acquire an additional 180 votes to reach the threshold of 420 votes.

The minimum number of additional shares needed to secure a seat is:
180 votes ÷ 2 votes per share = 90 additional shares

Therefore, the answer is not available
The correct answer should be D) 91.

There Is an Election Being Held to ﬁLl Two Seats