Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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If there are 10 directors to be elected and a shareholder owns 120 shares, calculate the maximum number of votes that he or she can cast for a favorite candidate under each of the voting methods.
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- 16 Midland Petroleum is holding a stockholders' meeting next month. Ms. Ramsey is the president of the company and has the support of the existing board of directors. All 12 members of the board are up for reelection. Mr. Clark is a dissident stockholder. He controls proxies for 51,001 shares. Ms. Ramsey and her friends on the board control 61,001 shares. Other stockholders, whose loyalties are unknown, will be voting the remaining 24,998 shares. The company uses cumulative voting. a. How many directors can Mr. Clark be sure of electing? (Do not round intermediate calculations. Round down your answer to the nearest whole number.) Number of directors b. How many directors can Ms. Ramsey and her friends be sure of electing? (Do not round intermediate calculations. Round down your answer to the nearest whole number.) Number of directors c-1. How many directors could Mr. Clark elect if he obtains all the proxies for the uncommitted votes? (Do not round intermediate calculations. Round down…arrow_forwardThe following events occurred regarding the company's executive compensation plan. 2. On 1/1/x4, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 20,000 shares of common stock at $40 per share. The par value is $10 per share. 3. On 2/1/x4, options were granted to each of five executives to purchase 20,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/x6. It is assumed that the options were for services performed equally in 20x4 and 20x5. The Black-Scholes option pricing model determines total compensation expense to be $2,100,000. 3. At 2/1/x6, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited Prepare the journal entries for 2/1/x6arrow_forwardSuppose, you own 2,000 shares in a company with 5,000 shares outstanding. There are 8 directors up for election via cumulative voting. How many directors can you elect?" 3 2 1 5 4arrow_forward
- Ms. Meyers wishes to know how many shares are necessary to elect 3 directors out of 9 directors up for election in the Austin Power Company. There are 88,000 shares outstanding. Note: Do not round intermediate calculations. > Answer is complete but not entirely correct. Number of shares 264,000 xarrow_forwardIn September, the board of directors of chaparral steel approved a 2 for 1 stock split. After the split, how many shares of chaparral steel stock will an investor have if he or she owned 230 shares before the split?arrow_forwardA VIE has three equity holders, Equity Holder 1 owns 20% of the C/S. Equity holder 2 owns 30% of the C/S and equity holder 3 owns 50% of the C/S. Each of the equity holders has 2 votes on a 6-person board. The board makes all decisions affecting the VIE’s policies and practices. Determine which party, if any, is the primary beneficiary and explain briefly why.arrow_forward
- ABC Co. needs to elect four individuals to board of directors position. ABC has 180,000 shares outstanding and the stock is currently selling for $30 . Individual A wants to serve on the board of directors. How much will it cost A (number of shares times price ) to buy a seat if the company uses straight voting? What if the firm uses cumulative voting? $2,700,030; $1,080,030 $2,640,030; $1,320,030 $2,700,030; $1,350,030 $2,640,030; 1,360,030 $2,710,030; $1,430,030arrow_forwardShareholders choose to invest in preferred shares because: a. preferred shares can always be converted into ordinary shares at the shareholder's option b. preferred shares include the right to participate in management decisions through voting privileges c. dividends are distributed to preferred shareholders before ordinary shareholders d. the preferred dividend distributions are generally increased each yeararrow_forwardJolie has an outstanding order with her stock broker to purchase 1,000 shares of every IPO. The current three IPOs are each priced at $16 a share and all started trading this morning. Jolie was allocated 300 shares of IPO A, 100 shares of IPO B, and 1,000 shares of IPO C. IPO A opened at $17 a share this morning and ended the day at $17.50 a share. IPO B opened at $21 a share and finished the day at $23 a share. IPO C opened at $16 a share and ended the day at $14.50 a share. What is Jolie's total profit or loss on these three IPOS as of the end of the day? O a. -$400 O b. -$350 O c. -$200 O d. -$150 O e. -$100arrow_forward
- b) Demonstrate that in principle the shareholders will be equally well off by subscribing to the issue or by selling their rights. Assume the shareholder has 100 shares c) Explain the impact on the value of the right if the issue is undertaken on the specified terms and the share (cum-rights) price falls to € 1.8 shortly after the shareholders are invited to subscribe to the new issuearrow_forwardDavid Rothchild owns 6,001 shares of the Motor Corp. There are 12 seats on the company board of directors, and the company has a total of 78,000 shares of stock outstanding. The Motor Corp. utilizes cumulative voting. A. Can David Rothchild elect himself to the board when the vote to elect 12 directors is held next week?arrow_forwardHow much is the ending balance of the Accrued Salaries Payable that will show in the 2026 Statement of Financial Position? How much is the ending balance of the Share Options Outstanding that will show in the 2026 Statement of Financial Position?arrow_forward
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