The Purpose of a Proxy Contest Is for a Group

question 17

Multiple Choice

The purpose of a proxy contest is for a group of shareholders to:

• A) Acquire all of the remaining outstanding shares.
• B) Accumulate sufficient votes to gain controlling seats on the board of directors.
• C) Take a company private.
• D) Maintain their current percentage ownership once a stock dividend is declared.
• E) Gain control of the preferred stock.

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Definitions:

Net Present Value

A method of evaluating investment opportunities that calculates the difference between the present value of cash inflows and outflows over a period of time.

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Salvage Value

The projected value of an asset for sale at the conclusion of its operational lifespan.