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. The company has 445,000 shares outstanding, and the stock currently sells for $54, If there are four seats in the current election, how much will it cost you to buy a seat?

Answer 1

$12,015,054

Step-by-step explanation:

For computing the cost, first we need to find out how much shares are needed which is shown below:

= (Number of shares) ÷ (two) + one

= (445,000 shares) ÷ (2) + 1

= 222,501 shares

Now the cost would be

= Number of shares needed × selling price per share

= 222,501 shares × $54

= $12,015,054

We assume the company use the straight voting