a.
To determine: The number of directors that can be elected for Beasley Corporation by the dissident stockholders with the proxies they hold now as well as the number of directors that would be elected under the majority rule with the proxies held.
Introduction:
Cumulative Voting:
It is a voting system helpful in strengthening the rights of minor shareholders. It also allows the shareholders to cast their vote to elect the board of directors of the company.
Shares Outstanding:
They are referred to as the common shares of the authorized company, which are actually held by the investors and represent ownership of the company. They are also termed as issued shares.
b.
To calculate: The number of shares or proxies required to elect 9 directors under cumulative voting in Beasley Corporation.
Introduction:
Cumulative Voting:
It is a voting system helpful in strengthening the rights of minor shareholders. It also allows the shareholders to cast their vote to elect the board of directors of the company.
Shares Outstanding:
They are referred to as the common shares of the authorized company, which are actually held by the investors and represent ownership of the company. They are also termed as issued shares.
Want to see the full answer?
Check out a sample textbook solutionChapter 17 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
- The executive officers of Welsh Inc. have a performance based compensation plan.The performance criterion of this plan is linked to growth in earnings per share. Whenannual EPS growth is 10%, the executives of Welsh will earn 100% of the shares; ifgrowth is 15%, they earn 125%. If EPS growth, however, is lower than 8%, theexecutives receive no additional compensation.In 2020, Shelly Prince, the financial controller of Welsh, reviews year end estimatesof bad debt expense and warranty expense. She calculates EPS growth of 10%. Amember of the executive mentioned to her that the estimate of bad debt expensemight be decreased, increasing EPS growth to 15%. Shelly is not sure she shouldinclude this because she believes that the current bad debt expense is sound. She doesrecognize though, that a great deal of subjectivity was involved in its computation.Instructionsi. What, if any, is the ethical dilemma facing Shelly Prince? ii. Should Shelly’s knowledge of the compensation plan influence…arrow_forwardWhich of the following actions would be likely to reduce potential conflicts of interest between stockholders and managers? a. A firm's compensation system is changed so that managers receive larger cash salaries but fewer long-term options to buy stock. b. The company changes the way executive stock options are handled, with all options vesting after 2 years rather than having 20% of the options awarded vest every 2 years over a 10-year period. c. The composition of the board of directors is changed from all inside directors to all outside directors, and the directors are compensated with stock rather than cash. d. The company's outside auditing firm is given a lucrative year-by-year consulting contract with the company. e. Congress passes a law that severely restricts hostile takeovers.arrow_forwardThe management of Blanche Inc. controls 58% of the company’s stock. The firm did not meet any of its quarterly sales projections for the last year. Some of the firm’s institutional investors are worried that the firm’s poor performance is partly because management has not been focused on maximizing shareholder wealth. Which of the following measures would the institutional investors most likely want to see implemented? They would want to make sure the company has a restricted voting rights provision. They would want to make sure the company’s charter contains a shareholder rights provision. They would want the company to ban targeted share repurchases.arrow_forward
- An employee, Fred, working in the accounts office of a medium-sized company listed on the Nairobi Stock Exchange, was working late one evening during the week. He realized he had left his pen in the boardroom at an earlier meeting and, given its value, went upstairs to look for it. As he approached the door he heard the following discussion:‘Chief Executive: I am deeply concerned that if this fall in profit figures is disclosed in the next annual report, there will be sorts of problems with the shareholders. We may even lose a number of big investors.Non-executive director (also the cousin of the Chief Executive): (large sign) well, I suppose we could always find a way of making them look better.Chief Executive: How? I can’t see it at all.Non-executive director: Well, we could make them just slightly higher than last year’s figures by including the proceeds of sales of our toothbrush division.Chief Executive: But the sale doesn’t go through until October.Non executive director: No, but…arrow_forwardhe board of directors of UT Wireless, Inc. is considering two compensation plans for the CEO of the company. The first would pay the CEO a salary of $300,000 for the upcoming year. The second would pay the CEO a salary of $150,000 and provide the CEO with a stock option to buy 100,000 shares of stock for $11 per share. The current price per share of UT Wireless, Inc. stock is $9 per share. The stock option expires at the end of the year. Why might shareholders prefer the second payment plan? As part of your answer, calculate the break-even point for the CEO to obtain the same compensation under option two as he or she would under option one. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). The board of directors of UT Wireless, Inc. is considering two compensation plans for the CEO of the company. The first would pay the CEO a salary of $300,000 for the upcoming year. The second would pay the CEO a salary of $150,000 and provide the CEO…arrow_forwardBedron Company is a closely held investment service group that has been quite successful overthe past 5 years, consistently providing most members of the top management group with 50%bonuses. In addition, both the chief financial officer and the chief executive officer have received100% bonuses. Bedron expects this trend to continue.Recently, Bedron’s top management group, which holds 35% of the outstanding shares ofcommon stock, has learned that a major corporation is interested in acquiring Bedron. The other corporation’s initial offer is attractive and is several dollars per share higher than Bedron’scurrent share price. One member of management told a group of employees under him about the potential offer. He suggested that they might want to purchase more Bedron stock at thecurrent price in anticipation of the takeover offer.Required:CONCEPTUAL CONNECTION Do you think that the employees should take the action suggested by their boss? Suppose the action is prohibited by Bedron’s…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_forwardBullant Inc. has decided to go public and has sold 2 million of its shares to its underwriter for $20 per share. The underwriter then sold them to the public for $22 each. Bullant also encountered $0.5 million in administrative fees. Soon after the issue, the stock price rose to $25. Find Bullant s total cost of this issue including any underpricing.arrow_forwardIn June 2019, Tech Mart, appointed Corie Barry as the new CEO. After having just two CEOs in its firs 43 years of operations (Richard Schulze and his successor, Brad Anderson), Tech Mart went through three top leaders in a six-month period in 2012. Brian Dunn resigned in April amidst a personal scandal after just three years at the helm. At the same time, founder Schulze stepped down from his role as chairman of the board and tried to reassert his control via a bid to take the company private. Hubert Joly assumed the lead position from interim CEO George Mikan in August 2012, and he immediately sought to turnaround Tech Mart and return it to profitability. Joly picked his successor in 2019, Corie Barry, who is the fifth CEO and first female leader of Tech Mart. Joly remains as chairman and Barryhas become one of the youngest CEO of a S&P500 company. After appointing Hubert Joly as CEO in 2012, Tech Mart experienced an impressive turnaround, and itsurvived a shakeout of traditional…arrow_forward
- Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company’s stock currently is valued at $48.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $38.40 per share. Larry worries about the value of his investment. Larry’s current investment in the company is . If the company issues new shares and Larry makes no additional purchase, Larry’s investment will be worth . This scenario is an example ofdilution . Larry could be protected if the firm’s corporate charter includes apreemptive right provision. If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will becomearrow_forwardZama Brooks Ltd is a company that has been known to have bad results for the past three years. Our company has been trying to carry out an analysis to undermine whether acquisition of controlling shares in Zama Brooks Ltd will yield fruits. You are the financial director in the company interested in obtaining controlling shares in Zama Brooks Ltd and management at the company are so eager to produce good results. Management has been labeled for producing bad results for the past two (2) years by shareholders at the annual general meetings and general meetings. Managers may be under pressure to ensure that the investment yield good results. A board meeting was held to discuss the acquisition of controlling shares in Zama Brooks Ltd for the reason that it might boost income levels of the company. Despite the Earnings per share (EPS) of that entity being diluted the board went ahead with the decision to acquire controlling shares in that company. On the other hand there is another firm…arrow_forwardI asked this before but the answers given were not correct and I cant figure out what else it could be. Suppose a firm has 16.9 million shares of common stock outstanding and eight candidates are up for election to four seats on the board of directors. a. If the firm uses cumulative voting to elect its board, what is the minimum number of votes needed to ensure election to the board?b. If the firm uses straight voting to elect its board, what is the minimum number of votes needed to ensure election to the board?(For all requirements, enter your answers in whole numbers, not millions.)arrow_forward
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningBusiness Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningBusiness/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:CengageAuditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning