Question

Laura owns 6,700 shares of GP Global stock worth $92,460. The firm has 15,000 shares outstanding. Each share is entitled to one vote under the straight voting policy of the firm. The next election is in four months at which time four directors are up for election. How much more must Laura invest in this firm to guarantee her election to the board?

Answer 1

Answer:

The correct answer is $11,053.80

Explanation:

Laura needs minimum (half + 1 ) of the total shares to win.

(15,000 ÷ 2) + 1

=7500 + 1

=7,501 shares (Laura needs)

Actually She has 6,700 shares.

Is necessary to buy 7,500-6,700= 801 shares

Now the cost per share

$92,460 ÷ 6,700 shares = $13.8 per share

Finally

$13.8 x 801 shares= $11,053.80

Laura needs to invest  $11,053.80 in this firm to guarantee her election to the board