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Mr. Hernandez controls proxies for 40,000 of the 75,000 outstanding shares of Northern Airlines. Mr. Lueng heads a dissident group

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Mr. Hernandez controls proxies for 40,000 of the 75,000 outstanding shares of Northern Airlines. Mr. Lueng heads a dissident group that controls the remaining 35,000 shares. There are seven board members to be elected and cumulative voting rules apply. Hernandez does not understand cumulative voting and plans to cast 100,000 of his 280,000 (40,000 × 7) votes for his brother-in-law, Sunil. His remaining votes will be spread evenly between three other candidates.
How many directors can Lueng elect if Hernandez acts as described in the preceding paragraph? Use logical numerical analysis rather than a set formula to answer the question. Lueng has 245,000 votes (35,000 × 7).

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Mr Hernandez controls 280 000 votes 40 000 shares 7 directors Mr Lueng controls 245 000 votes 35 00…View the full answer


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Foundations Of Financial Management

Foundations Of Financial Management

ISBN: 9781264097623

18th Edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

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Question Details
Chapter # 17- Common and Preferred Stock Financing
Section: Problem
Problem: 10
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Question Posted: September 28, 2023 03:58:08
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