Question

Blue Moon Corporation has one million shares of common stock outstanding. In a typical annual election for the board of directors, shareholders representing 70 percent of the shares outstanding exercise their right to vote. The company has nine members on it board of directors, all of whom are elected annually.

a. If the company uses a majority voting procedure to elect its board, now many votes are requied to elect
1. One director
2. Two directors
3. A majority of the members of the board of directors.

b. If the company uses a cummulative voting procedure, how many votes are required to elect
1. One director
2. Two directors
3. A majority of the members of the board of directors.

Answer 1

a. Number of votes cast = 0.7 x 1,000,000 = 700,000
i. 350,000 + 1
ii. 350,000 +1
iii. 350,000 +1
b. i. Number of shares = [(1) x (700,000)] / [(9) + 1] + 1 = 70,001
ii. Number of shares = [(2) x (700,000)] / [(9) + 1] + 1 = 140,001
ii. Number of shares = [(5) x (700,000)] / [(9) + 1] + 1 = 350,001