Final answer:
Given that you need more than half of the shares to guarantee a seat on Red Cow, Inc.'s board of directors with straight voting, you would need to purchase 102,501 shares at $87 each, totaling $8,917,587. This result does not match any of the provided multiple-choice answers, suggesting that additional information or clarification is needed to provide an accurate choice.
Step-by-step explanation:
The subject of this question is Business, particularly focusing on corporate finance and the processes of acquiring control in a company by purchasing shares. The grade level for this question is typically College, as the concepts of voting control through share ownership and the cost calculations associated with securing a seat on a board of directors are generally covered in advanced business and finance courses.
To guarantee election to the board with straight voting, you must secure more than half of the votes. With 205,000 shares outstanding, you would need to acquire 102,501 shares to have the majority. At $87 per share, this would cost 102,501 shares multiplied by $87, equating to $8,917,587. However, since this exact answer is not one of the options, we should look closer at the question to see if we can assume each vote equals one share and that there are no other mechanisms such as cumulative voting or proxy voting that could influence the outcome. Given the options provided, you may need to ask for clarification on the details or possible assumptions in the question. As it stands with the information given, none of the multiple-choice answers provided precisely align with the calculated cost for a majority stake.