Asked by Ke'Darius Thornton on May 05, 2024

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The practice that gives minority stockholders a chance to elect at least one director is called:

A) pre-emptive rights of stockholders.
B) maintaining proportionate ownership.
C) voting rights of stockholders.
D) cumulative voting.

Cumulative Voting

A method of electing boards of directors in which stockholders can cast all of their votes for a single seat. Enables minority interests to get at least some representation on the board.

Minority Stockholders

Minority stockholders are investors who own a smaller portion of a company's shares and typically do not have control or significant influence over the company's decisions.

  • Recognize the elements that influence the intrinsic value of a stock and the importance of fundamental analysis.
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ZK
Zybrea KnightMay 05, 2024
Final Answer :
D
Explanation :
Cumulative voting allows minority stockholders to concentrate all of their votes for one director, increasing their chances of being able to elect at least one member to the board of directors. This practice is designed to give minority shareholders a greater voice and representation on the board. Pre-emptive rights of stockholders, maintaining proportionate ownership, and voting rights of stockholders do not specifically address the issue of minority representation on the board of directors.