Theo owns 49,800 of the 120,000 outstanding shares of BBE Inc.The share price is $28.64.Each share is granted one vote for each open seat on the board of directors.Currently,there are three open seats.Theo wants to be on the board and is assuming that no one,other than himself,will vote for him.How much additional money,if any,must he invest in BBE to guarantee his election if the firm uses a straight voting system?

Question

Quizplus · Accepted Answer

Total number of shares needed = (0.5 × 120,000)+ 1 = 60,001 shares
Additional shares needed = 60,001 − 49,800 = 10,201 shares
Additional cost to purchase shares = 10,201 × $28.64 = $292,156.64

Theo Owns 49,800 of the 120,000 Outstanding Shares of BBE