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. a.If the company has 430,000 shares outstanding and the stock currently sells for $45, how much will it cost you to buy a seat if the company uses straight voting

Answer 1

$9,675,045

Step-by-step explanation:

In order to win the election of the board of directors, voting powers should have half a of the voting power and one vote.

Calculating the cost incurred to buy the voting power:

Total cost = [Number of shares / 2 + 1] * Stock price

Total cost = [430,000/2 + 1] * $45

Total cost = 215,001 * $45

Total cost = $9,675,045

So, it will cost one $9,675,045 to buy a seat if the company uses straight voting.