A firm has 200,000 shares outstanding. If three directors will be elected, how many shares do you need to control to assure yourself a seat on the board under cumulative voting procedures?

Question

Quizplus · Accepted Answer

Under cumulative voting, the number of shares needed to guarantee a seat is calculated by dividing the total number of shares by the number of directors to be elected plus one, and then adding one share. So, 200,000 / (3 + 1) + 1 = 50,001.

A Firm Has 200,000 Shares Outstanding