You own 40 of the stock of a company that has 10 directors o

You own 40% of the stock of a company that has 10 directors on its board. How much representation can you get on the board if the company has cumulative voting? How much representation can you ensure if the company has straight voting? How much representation can you get on the board if the company has cumulative voting? (Select the best choice below.) With cumulative voting you vote on each director individually, and without a majority of the shares you cannot ensure that your representative will win any of the elections (you could lose 60% to 40% in each of the ten individual elections). With cumulative voting you are able to get proportional representation by putting all of your votes toward 4 directors, allowing you to elect representatives to 4 seats (40% of ten seats) on the board. How much representation can you ensure if the company has straight voting? (Select the best choice below.) With non-cumulative voting you are able to get proportional representation by putting all of your votes toward 4 directors, allowing you to elect representatives to 4 seats (40% of ten seats) on the board. With non-cumulative voting you vote on each director individually, and without a majority of the shares you cannot ensure that your representative writ win any of the elections (you could lose 60% to 40% in each of the ten individual elections).

Solution

In the case of cumulative Voting

40% of 10 seats = 40/100 * 10 = 4 seats

The correct answer is Option B

With cumulative voting you are able to get proportional representation by putting all of your votest towards 4 directors, allowing you to elect representatives of 4 seats (40% of ten seats) on the board

In the case of straight voting

The correct answer is again Option B

With non-cumulative voting you vote on each director individually, and without a majorities of the share you cannot ensure that your representative will win any of the elections

You could lose 60% to 40% in each of the ten individual elections