Question

answer each question nice and neatly

You want a seat on the board of directors of Red Cow, Inc. The company has 280.000 shares of stock outstanding and the stock sells for $73 per share. There are current straight voting How much will it cost you to guarantee that you will be elected to the board? seats for election The company uses 16 O $10.220,073 0 $75.0 O Son

Answer 1

1) If the company uses straight voting, the board of directors will be chosen one at a time. Therefore, one will have to own at least half of the shares + 1 share to reserve a seat.

So, the number of shares needed = (2,80,000 / 2) + 1

                                                 = 1,40,000 + 1

                                                 = 140,001 shares

Total cost = shares needed * current price of share

              = 140,001 shares * $73 per share

              = $10,220,073

Hence, the correct answer is the first option '$10,220,073'.

2)

Income	Tax rate	Tax liability
Upto $50,000	Tax @ 15%	$7,500
$50,000 - $75,000 = $25,000	Tax @ 25%	$6,250
$75,001 - $81,400 = $6,399	Tax @ 34%	$2,175
$81,400 - $1,00,000 = $18,600	Tax @ 34%	$6,324
$100,001 - $104,000 = $3,999	Tax @ 39%	$1559

Upto the income of $81,400, the total tax liability will be $7500 + $6,250 + $2,175 = $15,925. If total income will increase by $22,600, then increase in tax liability will be $6,324 + $1,559.61 = $7,884 (rounded)

Hence, the correct option is first one '$7884'.