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 person voting for you. The company has 380,000 shares outstanding, and the stock currently sells for $41, If there are four seats in the current election, how much will it cost you to buy a seat? (Do not round intermediate calculations.)

Answer 1

$3,116,041

Step-by-step explanation:

For computing the cost of buying a set first we have to determined the percentage needed for the stock which is shown below:

= 1 ÷ (Number of seats + 1)

= 1 ÷ (4 +1 )

= 20%

Now number of stock required is

= (380,000 shares × 20% ) + 1

= 76,001 shares

So, the total cost required to buy a seat is

= 76,001 shares × $41

= $3,116,041

We simply multiplied the number of stock with the selling price of the stock so that the total cost could come