Miller's Hardware has 415,000 shares of stock outstanding with a current market value of $42 a share.You own 84,500 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 allocate all your votes to one candidate. Since you already own 84,500 shares, you can use all your votes for yourself, which is sufficient to guarantee election without spending additional money.

Miller's Hardware Has 415,000 Shares of Stock Outstanding with a Current