Kathryn owns 18,700 shares of Global Importers. Her shares have a total market value of $787,270. In total, the firm has 65,000 shares outstanding. Each share is entitled to one vote under the straight voting policy of the firm. The next election is in four months at which time two directors are up for election. How much more must Kathryn invest in this firm to guarantee that she is elected to the board?

Question

Quizplus · Accepted Answer

To guarantee election under straight voting, Kathryn needs more than half of the votes. With 65,000 shares outstanding, she needs 32,501 shares. She currently owns 18,700 shares, so she needs to buy 13,801 more shares. At the current price per share ($787,270 / 18,700), she needs to invest $581,022 more.

Kathryn Owns 18,700 Shares of Global Importers