Sharpe Products has one million outstanding shares and seven directors to be elected. Cumulonimbus Holdings owns 200,000 shares of Sharpe. How many directors can Cumulonimbus elect with cumulative voting?
A) 0
B) 1
C) 2
D) 3

Question

Quizplus · Accepted Answer

Cumulative voting allows shareholders to cast all of their votes for a single candidate or to distribute their votes among multiple candidates. In this case, Cumulonimbus Holdings owns 200,000 shares, which represents 20% of the outstanding shares. With cumulative voting, Cumulonimbus Holdings can elect one director by casting all of its votes for a single candidate.

Sharpe Products Has One Million Outstanding Shares and Seven Directors