In cumulative voting, you have multiple votes to cast per a share in elections for the companys directors. For instance, if there are three candidates running, then someone who holds one share of the firm will have three votes. Here, the shareholder will have option to either divert his/her votes to multiple candidates or cast all of his/her votes to a single candidate. A director will be elected if he/she receives 1 / (Number of Director Up for Election +1). For example, if the company is electing three directors, then a candidate who receives 1 / (3 + 1) = 25% of the vote will be elected.

Now assume that ABC Corp. will elect for six directors this year, and ABCs shareholder include ABC Holdings. Co, which has 87% of shares, John Doe, who has 7% of shares, and James Hoffa, who has 6% of shares. ABC Corp. will elect the new director based on cumulative voting. Currently, John Doe is planning to use all of his votes to vote for Jane Erickson, who Doe believes will best represent his interests as a shareholder. Hoffa is currently planning to vote for Willy Bulger, who Hoffa believes will best represent his interests. Recently, Doe and Hoffa began talking about the possibility where they will both pledge all of their votes to Henry Hill, a compromise candidate who they thought could represent both of their interest to some extent. Which of the following most accurately describes a possible outcome of this election?

Group of answer choices

1. If Doe votes for Erickson and Hoffa votes for Bulger, then Erickson will not be elected but Bulger will be elected as a director.8.50

2. If Doe votes for Erickson and Hoffa votes for Bulger, then both Erickson and Bulger will be elected as a director.

3. Neither Doe nor Hoffa will be able to elect any director for the firm even if they both pledge all of their votes to Harry Hill, the compromise candidate.

4. Doe and Hoffa will be able to elect Harry Hill, the compromise candidate, as one of the new directors if they both pledge all of their votes to Hill.