Final answer:
To determine a share's value in Babble, Inc., the future profit dividends are discounted to their present values and divided by the number of outstanding shares. For The Darkroom Windowshade Company, a majority of over 50% of votes is necessary to change top management, so investors 1 and 2 need additional support beyond their 38,000 shares to ensure control.
Step-by-step explanation:
The student's question relates to finance and business, specifically share valuation and corporate governance within a company. First, we'll determine the value of a share of stock in Babble, Inc., given the information on their profit distribution and the future disbanding of the company. We will then explore the voting power needed to change top management in The Darkroom Windowshade Company.
For Babble, Inc., we know that the company will be disbanded in two years, and profits will be distributed as dividends when earned. To calculate the value of a share, we need to consider the present value of the dividend payments.
Assuming a certain required rate of return by investors (which is not provided in the question), we would discount the future payments of $15 million, $20 million, and $25 million to their present values and sum them up. After this, we would divide the total present value by the number of shares (200 shares) to find the value of one share.
For The Darkroom Windowshade Company, to change the top management, a majority of the shareholders must agree, meaning more than 50% of the voting power is needed. With 100,000 shares outstanding, more than 50,000 shares worth of votes are required.
If investors 1 and 2 vote together, holding a combined total of 38,000 shares, they cannot ensure that they will always get their way since they do not reach the majority of 50,001 shares. They would need to collaborate with at least one other investor to reach the minimum number of votes required for a majority.