1. Canadian National Railway sold 10 million shares of stock to the public at $30 per share. The company received net proceeds from its underwriters of $287,506,114. What was the underwriting spread from this stock offering?
2. Suppose you have accumulated a sizable investment (100,000 common shares) in Alpine Land and Development Company. You are dissatisfied with the performance of the current management and are considering running for the board of directors. The company has a nine-member board and a total of 1.5 million common shares outstanding. Assume that all shares will be voted in the upcoming election and that four of the nine board members are up for reelection.
a. If the voting procedure is cumulative, what number of shares is necessary to ensure your election to the board? Is it possible for you to be elected with fewer votes? Explain.
b. Suppose a close friend of yours also owns a good deal of Alpine and shares your feelings about the current management. If the voting procedure is cumulative, how many shares are necessary to elect both you and your friend to the board?
c. If the voting procedure is majority, how many votes are necessary for election in parts a and b of this problem? Explain your answer.