After successfully completing your corporate finance class, you feel the next ch
ID: 1176141 • Letter: A
Question
After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Marine Enterprises. Unfortunately, you will be the only individual voting for you. If Marine Enterprises has 350,000 shares outstanding and the stock currently sells for $52, which of the following scenarios would be the least expensive in order for you to buy a seat on the board? Only one open seat; Voting method does not matter Two open seats; Company uses straight voting Two open seats; Company uses cumulative voting Three open seats; Company uses straight voting Three open seats; Company uses cumulative voting
Explanation / Answer
The least expensive option to buy a seat on the board would be inorder to :
Three open seats along with company using a cumulative voting because cumulative voting would be more feasible to buy a seat rather than buying a noncumulative voting seat.