Theo owns 13,400 of the 85,000 outstanding shares of BBE Inc.The shares sell for $22.40.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 = (.5 × 85,000)+ 1 = 42,501 sharesAdditional shares needed = 42,501 - 13,400 = 29,101 sharesAdditional cost to purchase shares = 29,101 × $22.40 = $651,862.40

Theo Owns 13,400 of the 85,000 Outstanding Shares of BBE