Jen Owns 30 Shares of Stock in Delta Fashions and Wants

question 30

Multiple Choice

Jen owns 30 shares of stock in Delta Fashions and wants to win a seat on the board of directors. The firm has a total of 100 shares of stock outstanding. Each share receives one vote. Presently, the company is voting to elect three new directors. Which one of the following statements must be true given this information?

• A) Regardless of the voting procedure, Jen does not own enough shares to gain a seat on the board.
• B) If straight voting applies, Jen is assured a seat on the board.
• C) If straight voting applies, Jen can control all of the open seats.
• D) If cumulative voting applies, Jen is assured one seat on the board.
• E) If cumulative voting applies, Jen can control all of the open seats.

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Definitions:

Express Corporate Powers

The specific authorities granted to a corporation through its charter and state law, allowing it to perform certain actions.

Corporate Veil

A legal concept that separates the identity and responsibilities of a corporation from those of its shareholders, protecting them from personal liability in most cases.

Promoter

An individual or company responsible for organizing and starting a business or enterprise, often involved in its early financing and establishment.

Subscriber

An investor who agrees to purchase stock in a new corporation.