Cumulative voting: Cumulative voting is a method of election in a company for electing a board of directors, where each shareholder is given one vote for a share multiplied by the number of vacant positions for directors. It is the choice of a shareholder to cast votes among several directors or to give all the votes to one director only.
Straight voting: Straight voting is a method of election in a company where each shareholder is given a vote for a share and votes must be divided equally among the candidates. For example, if there are two persons standing as a candidate for the position of directors. A shareholder who has five shares will be able to vote five times for each candidate.
To determine:
The representation of votes when the company has cumulative voting or straight voting.
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Fundamentals of Corporate Finance, Student Value Edition
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