question archive 2) You own 30% of the stock of a company that has 10 directors on its board
2) You own 30% of the stock of a company that has 10 directors on its board
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2) You own 30% of the stock of a company that has 10 directors on its board. How much representation can you get on the board if the company has cumulative? voting? How much representation can you ensure if the company has straight? voting?
How much representation can you get on the board if the company has cumulative? voting? ?(Select the best choice? below.)
A.With cumulative voting you vote on each director? individually, and without a majority of the shares you cannot ensure that your representative will win any of the elections? (you could lose 70% to 30% in each of the ten individual? elections).
B.With cumulative voting you are able to get proportional representation by putting all of your votes toward 3?directors, allowing you to elect representatives to 3 seats ?(30% of ten? seats) on the board.
How much representation can you ensure if the company has straight? voting? ?(Select the best choice? below.)
A.With? non-cumulative voting you are able to get proportional representation by putting all of your votes toward 3 ?directors, allowing you to elect representatives to 3 seats?(30% of ten? seats) on the board.
B.With? non-cumulative voting you vote on each director? individually, and without a majority of the shares you cannot ensure that your representative will win any of the elections? (you could lose 70% to 30% in each of the ten individual? elections).
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For Cumulative Voting.
B. With cumulative voting you are able to get proportional representation by putting all of your votes toward 3?directors, allowing you to elect representatives to 3 seats ?(30% of ten? seats) on the board.
For Straight Voting.
B. With? non-cumulative voting you vote on each director? individually, and without a majority of the shares you cannot ensure that your representative will win any of the elections? (you could lose 70% to 30% in each of the ten individual? elections).
Step-by-step explanation
Cumulative Voting
This allows votes to be weighted based on the preference of shareholder.
It improved the minority shareholder's probability of influencing a vote.
In Cumulative voting, each of the 30% shares have the option of casting al of their votes for just a single candidate or alternatively on 3 candidates thus winning the election based on many votes for 3 candidates.
Straight Voting
Also referred to as statutory voting
Here, shareholders have one vote per share, as such the votes have to be distributed equally among issues.
