Miller's Hardware has 370,000 shares of stock outstanding with a current market value of $37 a share.You own 48,000 of those shares.Next month,the election will be held to select four new members to the board of directors.The firm uses a cumulative voting system.How much additional money do you need to spend to guarantee that you will be elected to the board assuming that everyone else votes for one of the other candidates?

Question

Quizplus · Accepted Answer

Shares needed = {[1/(4 + 1)] × 370,000} + 1 = 74,001. You already own sufficient shares to guarantee your election.

Miller's Hardware Has 370,000 Shares of Stock Outstanding with a Current