Asked by gagan singh on May 17, 2024
Verified
Cumulative voting makes it possible for minority shareholders to gain representation on the board of directors.
Cumulative Voting
Cumulative voting is a method used in corporate elections, allowing shareholders to allocate their votes in any manner they choose among the candidates, offering minority shareholders a better chance of representation.
Minority Shareholders
Shareholders who own less than 50% of a company's shares and therefore, have less influence over decision making.
Board Of Directors
A group of individuals elected by shareholders to oversee the management and make strategic decisions for a corporation.
- Understand the impact of dividend policies and growth forecasts on the valuation of stocks.
Verified Answer
HS
Herschell Shaka MomoduMay 22, 2024
Final Answer :
True
Explanation :
Cumulative voting allows shareholders to allocate all of their votes for a particular candidate or split them among multiple candidates. This gives minority shareholders a better chance of electing at least one director to the board.
Learning Objectives
- Understand the impact of dividend policies and growth forecasts on the valuation of stocks.