Series 7 practice questionmediumEquity Securities — Cumulative Voting
Under cumulative voting, a shareholder who owns 300 shares and is voting on 4 board seats may cast how many total votes?
- A300 votes
- B75 votes
- C4 votes
- D1,200 votes✓ Correct answer
Explanation
Why D — 1,200 votes
Under cumulative voting, a shareholder multiplies the number of shares owned by the number of board seats being elected. With 300 shares and 4 seats, the shareholder has 1,200 total votes (300 x 4). These votes may be distributed among candidates in any way the shareholder chooses, which benefits minority shareholders.
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