After successfully completing your corporate finance class, you feel the next ch
ID: 2702328 • 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 Schenkel Enterprises. Unfortunately, you will be the only person voting for you. If Schenkel has 360,000 shares outstanding, and the stock currently sells for $37, how much will it cost you to buy a seat if the company uses straight voting?
After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only person voting for you. If Schenkel has 360,000 shares outstanding, and the stock currently sells for $37, how much will it cost you to buy a seat if the company uses straight voting?
Explanation / Answer
Shared needed= (360,000 shares /2) +1 =180 001
Total cost = 180 001 x37=6660037
Percent of stock need=0.20%
Number of stock to purchase=(360,000 shares x0.20)+1=72001
Cost =72001 x 37=2664037