Question
The shareholders of Firm A need to elect four new directors. There are 800,000 shares outstanding currently trading at $45 per share. You would like
The shareholders of Firm A need to elect four new directors. There are 800,000 shares outstanding currently trading at $45 per share. You would like to serve on the board of directors. However, no one else would like to vote for you. Currently you dont have any shares of Firm A
a) How much will it cost you to be certain that you can be elected as a director if the company uses straight voting?
b) How much will it cost you to be certain that you can be elected as a director if the company uses cumulative voting?
c) Which voting system will benefit minority shareholders? Explain.
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