A corporation has 1,000,000 shares outstanding and 10 directors are up for election. If the stock features cumulative voting, approximately how many shares do you have to muster in order to guarantee yourself a place on the board of directors? (Ignore possible ties)
A) 500,000
B) 200,000
C) 100,000
D) None of the above

Question

Quizplus · Accepted Answer

Cumulative voting allows shareholders to concentrate their votes on a single candidate, increasing the chances of electing a minority candidate. To guarantee a place on the board, a shareholder must have enough shares to cast a majority of the votes for one candidate. In this case, the shareholder needs to have more than 50% of the total shares outstanding, which is 1,000,000 shares. Therefore, the shareholder needs to muster at least 100,000 shares to guarantee a place on the board of directors.

A Corporation Has 1,000,000 Shares Outstanding and 10 Directors Are