Series 7 Exam Question 299: Answer and Explanation

Question: 299

Cain Weidman owns 1,000 shares of HIT Corp. HIT issues stock with cumulative voting. What is the maximum number of votes that Cain can cast for one candidate if there are four vacancies on the board of directors of HIT?

• A. 100
• B. 250
• C. 1,000
• D. 4,000

Correct Answer: D

Explanation:

D. Cain has a total of 4,000 votes (1,000 shares × 4 vacancies). Since HIT allows cumulative voting, Cain can vote the shares in any way that he sees fit, even if he votes them all for one candidate. Statutory or regular voting would only have allowed Cain to vote up to 1,000 shares for each candidate.