You wish to be on the board of directors of a company. If you wish to buy as low a percentage of the total outstanding shares as is necessary to guarantee yourself a seat on the board, you should look for a firm that has ____________.

A) Cumulative preferred stock.
B) Cumulative voting Class B stock.
C) Convertible debentures.
D) Straight voting common stock.
E) Cumulative voting common stock.

Question

Janeth Mellado · Accepted Answer

Final Answer : E, Explanation :  Cumulative voting common stock gives minority shareholders a better chance of gaining representation on the board of directors by allowing them to concentrate their votes on fewer candidates. This means you would need to buy a lower percentage of the total outstanding shares to guarantee yourself a seat on the board compared to other voting methods, such as straight voting.

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