Managerial Finance
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4. The Beasley Corporation has been experiencing declining earnings, but has just announced a 50 percent salary increase for its top executives. A dissident group of stockholders wants to oust the existing board of directors. There are currently 11 directors and 30,000 shares of stock outstanding. Mr. Wright, the president of the company, has the full support of the existing board. The dissident stockholders control proxies for 10,001 shares. Mr. Wright is worried about losing his job.
a. Under cumulative voting procedures, how many directors can the dissident stockholders elect with the proxies they now hold?
How many directors could they elect under majority rule with these proxies?
b. How many shares (or proxies) are needed to elect six directors under cumulative voting?
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Solution Summary
This question involves the fundamentals of Managerial Finance
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Hi there,
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<br>Here is some background info on cumulative voting:
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<br>It is a method of voting for corporate directors. In contrast to statutory voting, cumulative voting allows shareholders to multiply the number of shares owned by the number of directorships being voted. The votes may be cast in any manner that the holder chooses--all for one director or any combination thereof. If a corporation, for example, has 6 openings to the Board of ...
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