After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on

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 individual voting for you. If Schenkel has 400,000 shares outstanding and the stock currently sells for $48, how much will it cost you to buy a seat if the company uses straight voting? 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 now?

Cumulative Voting
Cumulative voting is the procedure followed when electing a company's directors. Typically, each shareholder is entitled to one vote per share multiplied by the number of directors to be elected. This is a process sometimes known as proportional...