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 470,000 shares outstanding and the stock currently sells for $41, how much will it cost you to buy a seat if the company uses straight voting

Answer 1

Answer: $9,635,041

Step-by-step explanation:

With 470,000 shares, you will need to hold a majority to vote yourself into the board.

To gain a majority, you need more than 50% of the shares:

= 470,000 / 2 + 1 share to give you majority

= 235,001 shares

The cost of 235,001 shares is:

= 235,001 * 41

= $9,635,041