After successfully completing your corporate finance class, you feel the next ch
ID: 2786899 • 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. Schenkel has 420,000 shares outstanding, and the stock currently sells for $49. Assume that Schenkel uses cumulative voting, and there are four seats in the current election. How much will it cost you to buy a seat? (Do not round intermediate calculations.)
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. Schenkel has 420,000 shares outstanding, and the stock currently sells for $49. Assume that Schenkel uses cumulative voting, and there are four seats in the current election. How much will it cost you to buy a seat? (Do not round intermediate calculations.)
Explanation / Answer
Total number of share needed= Total share ×number of director want to elect/(Total director to be elected+1) Total number of share needed= 420000×1/(4+1) Total number of share needed= 84000 Total number of share needed= 84001 cost to buy =84001×49 =4116049