Jack owns 35 shares of stock in Beta, Inc. and wants to exercise as much control as possible over the company. Beta, Inc. has a total of 100 shares of stock outstanding. Each share receives one vote. Presently, the company is voting to elect two new directors. Which one of the following statements must be true given this information?

Question

Quizplus · Accepted Answer

Cumulative voting gives a shareholder more control when they own a significant, but not majority, portion of the shares. With 35 out of 100 shares, Jack can allocate all his votes to one candidate in a cumulative voting scenario, significantly increasing the chances of securing at least one seat on the board. Straight voting, where each share equals one vote per director position, does not guarantee Jack any control because he does not own a majority of the shares.

Jack Owns 35 Shares of Stock in Beta, Inc