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Postby chandniwadhwani92 » Sun Nov 02, 2014 6:31 pm

In schswer pg 260 it is given if holder has 30% of firm share could choose 3 of 10 directors in cumulative voting but could not elect any director in statutory voting

why cant he elect in statutory????//

Finance Junkie
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Postby edupristine » Mon Nov 03, 2014 10:27 am

Suppose, there are 100 shares of a firm. A given shareholder has 30% firm shares i.e 30 shares.

In statutory voting, the maximum votes you can give to a director are 30 and none of the director can be finally elected with 30 votes. A minimum of 50 votes are required.

However in cumulative voting, the given shareholder can give all his 90 (30+30+30) votes to one director thus electing him.

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