FIN 3303 Midterm: FIN 3303 exam 3 study guide
11 Apr 2018
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Small firm, usually the major stockholder is the president and chair of board of directors. Managements of most publicly owned firms can be removed by the stockholders if the management team is not effective. State/federal laws determine how stockholder control is to be exercised. Each share of stock gives one vote. Transfer right to vote to another person instead of appearing in person. If earnings are poor and stockholders are dissatisfied, an outside group may solicit the proxies in an effort to overthrow management and take control of the business. One corp taking over another by purchasing the majority of outstanding stocks. Managers without more than 50% of firm"s stock are very worried about proxy fights and takeovers, many attempt approval from stockholders to change corporate charter making takeovers etc more difficult, like: Only electing of directors each year. Require 75% instead of 50% of stockholders to agree on merger.
