Mr. Michaels controls proxies for 40,000 of the 75,000 outstanding shares of Northern Airlines. Mr. Baker heads a dissident group that controls the remaining 35,000 shares. There are seven board members to be elected and cumulative voting rules apply. Michaels does not understand cumulative voting and plans to cast 100,000 of his 280,000 (40,000 × 7) votes for his brother-in-law, Scott. His remaining votes will be spread evenly for three other candidates.
Mr. Michaels controls proxies for 40,000 of the 75,000 outstanding shares of Northern Airlines. Mr. Baker heads a dissident group that controls the remaining 35,000 shares. There are seven board members to be elected and cumulative voting rules apply. Michaels does not understand cumulative voting and plans to cast 100,000 of his 280,000 (40,000 × 7) votes for his brother-in-law, Scott. His remaining votes will be spread evenly for three other candidates.
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Transcribed Image Text:Mr. Michaels controls proxies for
40,000 of the 75,000 outstanding
shares of Northern Airlines. Mr. Baker
heads a dissident group that controls
the remaining 35,000 shares. There
are seven board members to be
elected and cumulative voting rules
apply. Michaels does not understand
cumulative voting and plans to cast
100,000 of his 280,000 (40,000 x 7)
votes for his brother-in-law, Scott. His
remaining votes will be spread evenly
for three other candidates.
How many directors can Baker elect if
Michaels acts as described above?
Assume Mr. Baker casts an equal
number of votes for each open
position. (Do not round intermediate
calculations and input your answer as
a whole number.)
(THE ANSWER IS NOT 4)
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