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Analyzing and Computing Issue Price, Treasury Stock Cost, and Shares Outstanding Following is the stockholders’ equity section of the December 31, 2018, Caterpillar Inc. balance sheet. How many shares of Caterpillar common stock are outstanding at year-end 2018?

a. 5,827 million
b. 814,894,624
c. 239,351,886
d. 14,080 million

User Zub
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1 Answer

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Final answer:

The minimum number of investors needed to vote for a change in top management is determined by the total number of outstanding shares. Investors 1 and 2 cannot be certain of always getting their way in how the company will be run.

Step-by-step explanation:

The minimum number of investors it would take to vote to change the company's top management is determined by the total number of outstanding shares required to reach a majority. In this case, the company has 100,000 shares of stock outstanding. To reach a majority, more than 50,000 shares need to be voted in favor of the change. The investors with the highest number of shares are investors 1 and 2, who together own 38,000 shares. Therefore, with the support of these two investors, at least three additional investors with a total of at least 12,000 shares need to vote in favor of the change in order to reach a majority.



However, even with the support of investors 1 and 2, they cannot be certain of always getting their way in how the company will be run. This is because there are other investors who collectively own a significant number of shares (investors 3 to 11 own a total of 55,000 shares). If these investors vote together, they could still influence the decision-making process and potentially prevent investors 1 and 2 from always getting their way.

User Kind Stranger
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