FINA601 Lecture Notes - Lecture 5: Cumulative Voting, Preferred Stock, High-Yield Debt
Document Summary
Week 5 lecture 5 (cid:3238) chapter 15: long-term financing. Some features of common stock (15. 1: the term common stock means different things to different people, but it is usually applied to stock that has no special preference either in receiving dividends or in bankruptcy. Shareholder rights: a corporation"s shareholders elect directors who, in turn, hire management to carry out their directives. Shareholders, therefore, control the corporation through the right to elect the directors. However, the exact mechanism for electing directors differs across companies. This is usually calculated as the number of shares (owned or controlled) multiplied by the number of directors to be elected: with cumulative voting, the directors are elected all at once. However, with straight voting, the directors are elected one at a time. Proxy voting: a proxy is the grant of authority by a shareholder to someone else to vote her shares.
