Miller's Hardware has 185,000 shares of stock outstanding with a current market value of $27 a share. You own 38,000 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

In a cumulative voting system, you can concentrate all your votes on one candidate. You already own enough shares (38,000) to guarantee your election without spending additional money, as you can allocate all your votes to yourself.

Miller's Hardware Has 185,000 Shares of Stock Outstanding with a Current