Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 4QP
Summary Introduction
To determine: How confident BB can be when one of her friend is contesting in cumulative voting method election. Also, will BB’s friend be elected for sure if the voting procedure is changed.
Cumulative voting:
Cumulative voting is a voting method conducted with minority candidates. During cumulative voting, the overall number of votes that every candidate may cast is evaluated. The cumulative voting is compute as the total number of shares owned multiplies by the total number of directors to be elected.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Highway 65, Incorporated, is going to elect Seven board members next month.
Marisol owns 17.3 percent of the total shares outstanding.
a. What percentage of stock is needed to have one of her friends elected under the
cumulative voting rule? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What percentage of stock is needed to have one of her friends elected under the
staggered cumulative voting rule, under which shareholders vote on One board
member(s) at a time? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a. Percent of stock needed
b. Percent of stock needed
%
%
Highway 65, Incorporated, is going to elect Seven board members next month.
Marisol owns 17.3 percent of the total shares outstanding.
a. What percentage of stock is needed to have one of her friends elected under the
cumulative voting rule? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What percentage of stock is needed to have one of her friends elected under the
staggered cumulative voting rule, under which shareholders vote on One board
member(s) at a time? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer is complete but not entirely correct.
8.33%
a. Percent of stock needed
b. Percent of stock needed
50.00
%
Midland Petroleum is holding a stockholders' meeting next month. Ms. Ramsey is the president of the company and has the support of
the existing board of directors. All 12 members of the board are up for reelection. Mr. Clark is a dissident stockholder. He controls
proxies for 41,001 shares. Ms. Ramsey and her friends on the board control 51,001 shares. Other stockholders, whose loyalties are
unknown, will be voting the remaining 24,998 shares. The company uses cumulative voting.
a. How many directors can Mr. Clark be sure of electing?
Note: Do not round intermediate calculations. Round down your answer to the nearest whole number.
Number of directors
b. How many directors can Ms. Ramsey and her friends be sure of electing?
Note: Do not round intermediate calculations. Round down your answer to the nearest whole number.
Number of directors
c-1. How many directors could Mr. Clark elect if he obtains all the proxies for the uncommitted votes?
Note: Do not round intermediate calculations.…
Chapter 15 Solutions
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 15 - Bond Features What are the main features of a...Ch. 15 - Prob. 2CQCh. 15 - Preferred Stock Preferred stock doesnt offer a...Ch. 15 - Preferred Stock and Bond Yields The yields on...Ch. 15 - Prob. 5CQCh. 15 - Call Provisions A company is contemplating a...Ch. 15 - Prob. 7CQCh. 15 - Preferred Stock Do you think preferred stock is...Ch. 15 - Long-Term Financing As was mentioned in the...Ch. 15 - Internal versus External Financing What is the...
Ch. 15 - Prob. 11CQCh. 15 - Classes of Stock Several publicly traded companies...Ch. 15 - Callable Bonds Do you agree or disagree with the...Ch. 15 - Bond Prices If interest rates fall, will the price...Ch. 15 - Sinking Funds Sinking funds have both positive and...Ch. 15 - Prob. 1QPCh. 15 - Prob. 2QPCh. 15 - Prob. 3QPCh. 15 - Prob. 4QPCh. 15 - Financial Leverage Kiedis, Corp., has...Ch. 15 - Financial Leverage Frusciante, Inc., has 290,000...Ch. 15 - Financial Leverage Harrison, Inc., has the...Ch. 15 - Valuing Callable Bonds KJC, Inc., plans to issue 5...Ch. 15 - Valuing Callable Bonds New Business Ventures,...Ch. 15 - Valuing Callable Bonds Bowdeen Manufacturing...Ch. 15 - Prob. 11QPCh. 15 - Prob. 12QP
Knowledge Booster
Similar questions
- 16 Midland Petroleum is holding a stockholders' meeting next month. Ms. Ramsey is the president of the company and has the support of the existing board of directors. All 12 members of the board are up for reelection. Mr. Clark is a dissident stockholder. He controls proxies for 51,001 shares. Ms. Ramsey and her friends on the board control 61,001 shares. Other stockholders, whose loyalties are unknown, will be voting the remaining 24,998 shares. The company uses cumulative voting. a. How many directors can Mr. Clark be sure of electing? (Do not round intermediate calculations. Round down your answer to the nearest whole number.) Number of directors b. How many directors can Ms. Ramsey and her friends be sure of electing? (Do not round intermediate calculations. Round down your answer to the nearest whole number.) Number of directors c-1. How many directors could Mr. Clark elect if he obtains all the proxies for the uncommitted votes? (Do not round intermediate calculations. Round down…arrow_forwardSharon Bohnette owns 900 shares of Northern Chime Company. There are four seats on the board of directors up for election and Ms. Bohnette is one of the nominees. Under the traditional method of voting, how many votes may she cast for herself? Round your answer to the nearest whole number. votes How many votes may she cast for herself under the cumulative method of voting? Round your answer to the nearest whole number. votesarrow_forwardYou want a seat on the board of directors of Red Cow, Inc. The company has 260,000 shares of stock outstanding and the stock sells for $51 per share. There are currently 5 seats up for election. The company uses straight voting. How much will it cost you to guarantee that you will be elected to the board?arrow_forward
- Carl Hubbell owns 6,001 shares of the Piston Corp. There are 12 seats on the company board of directors, and the company has a total of 78,000 shares of stock outstanding. The Piston Corp. utilizes cumulative voting. Can Mr. Hubbell elect himself to the board when the vote to elect 12 directors is held next week? (Use Formula 17-2 to determine if he can elect one director.)arrow_forwardSharon Bohnette owns 1,300 shares of Northern Chime Company. There are six seats on the board of directors up for election and Ms. Bohnette is one of the nominees. Under the traditional method of voting, how many votes may she cast for herself? Round your answer to the nearest whole number.arrow_forwardA firm has four open positions on its board of directors. How many shares do you need to own to guarantee your own election to the board if the firm has 387,500 shares of stock outstanding and uses cumulative voting? Each share is granted one vote.arrow_forward
- 5.arrow_forwardDavid Rothchild owns 6,001 shares of the Motor Corp. There are 12 seats on the company board of directors, and the company has a total of 78,000 shares of stock outstanding. The Motor Corp. utilizes cumulative voting. A. Can David Rothchild elect himself to the board when the vote to elect 12 directors is held next week?arrow_forwardieko holds 50 out of 180 shares of Natural Gas, Inc. Natural Gas uses cumulative voting to elect directors. At the annual shareholder meeting, the shareholders must vote for 5 new directors. This means that a. Mieko has a total of 180 votes which has may cast all on one candidate or split them among several nominees. b. Mieko has a total of 250 votes which he may cast all on one candidate or split them among several nominees. c. Meiko has a total of 50 votes which he may cast all on one candidate or split them among several nominees. d. Mieko has a total of 200 votes which he may cast all on one candidate or split them among several nominees.arrow_forward
- If there are 10 directors to be elected and a shareholder owns 120 shares, calculate the maximum number of votes that he or she can cast for a favorite candidate under each of the voting methods. Maximum Number of Votes a. Majority voting b. Cumulative votingarrow_forwardNeed answer the questionarrow_forwardSokka Inc has 210,000 sharesoutstanding priced at $29 a share.There will be four open positions. on its board in the next election.Currently, you are not a shareholder but would like to become one and alsogain a seat on the board. How muchwill it cost you to buy a seat if thecompany uses straight voting?A) $2,646,077 B) $3,670,947 C)$3,012,044 D)1,218,029 E)$3,045,029 Please answer fast I will give you upvotearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT