Asked by Jacob Willard on Jul 01, 2024
Verified
ABC Co. is owned by a group of shareholders, all of whom vote independently and all of whom want personal control over the firm. If straight voting is used, a shareholder:
A) Must either own enough shares to totally control the elections or else he/she has no control whatsoever.
B) Will be able to elect at least one director as long as there are at least three open positions and the shareholder owns at least 25% plus one of the outstanding shares.
C) Must own at least two-thirds of the shares, plus one, to exercise control over the elections.
D) Is only permitted to elect one director, regardless of the number of shares owned.
E) Who owns more shares than anyone else, regardless of the number of shares owned, will control the elections.
Straight Voting
A method of voting in corporate elections where shareholders must vote for directors individually, allocating one vote per share owned to each board candidate.
Personal Control
The extent to which individuals feel they can control their environment and outcomes, affecting their motivation and behavioral engagements.
- Identify the voting procedures and rights of shareholders in corporate governance.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
A
Explanation :
In straight voting, control over the election of directors is binary: a shareholder must own a majority of shares to control the outcome of the elections, as votes are allocated per share for each director position. Without a majority, the shareholder cannot ensure control over any election outcome.
Learning Objectives
- Identify the voting procedures and rights of shareholders in corporate governance.