Alicia Fuentes owns 15 shares of stock in the Shale Oil Company, a large corporation that deals with

Alicia Fuentes owns 15 shares of stock in the Shale Oil Company, a large corporation that deals with oil and gas products. Hugh Jones, a friend of Alicia s, owns 20 shares. Today they both received an invitation to attend the annual stockholders meeting in Chicago, which neither can attend. They had this conversation over dinner at a local restaurant. 1. Whether they vote “for” or “against” the proposals listed on the proxy statement, how many votes can Alicia and Hugh cast? 2. If the proxy statement is like the one shown in Figure 6-6 and Hugh signs it but does not mark “for” or “against” the two proposals, how do you think the management will use the proxy? 3. If Hugh or Alicia wanted an important proposal to be made known and voted on by the stockholders, how could they achieve their goal? 4. How should Alicia and Hugh have received information about each of the proposals from management that would enable them to vote with adequate information? 5. What might an outside board member do that an inside member might not do?

 

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