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2 October, 23:02

A firm is using cumulative voting and four director spots are up for election. There are 3.6 million shares outstanding. How many shares must a minority owner own or control to ensure that he or she can gain control of one seat on the board of directors?

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  1. 3 October, 00:06
    0
    Answer: 720,001 shares

    Explanation:

    GIVEN the following:

    Outstanding shares = 3.6 million

    Number of directors = 4

    Number of shares a minority must buy to gain control of one seat.

    Buy using cumulative voting:

    [Number of shares : (number of directors +, 1) ] + 1

    [3,600,000 : (4 + 1) ] + 1

    720,000 + 1

    = 720,001

    The (1) added at the end of the equation is the extra share needed to leap through.

    Therefore, the number of shares a minority must buy in other to gain control of one seat on the board of directors is 720,001 shares.
  2. 3 October, 02:06
    0
    A minority owner own or control to ensure that he or she can gain control of one seat on the board of directors must have 720001 shares.

    Explanation:

    Number of shares he must own = Total number of shares / (Number of directors + 1)

    = 3.6 million / (4+1) + 1

    = 720001
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