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Which of the following best illustrates a limitation of voting compared to financial markets in aggregating preferences?
What is a key difference between the voting process and financial markets as mechanisms for aggregating individual preferences?
Compute the wealth of shareholders 1, 2, 3 after investing in the project.
What is the value of the company?
What is the total company value following the point of view of each shareholder after investing in the project.
What is each shareholder wealth before investing in the project?
What is the value of 1 share?
Compute the expected net gain of each shareholder (NPV, suppose no discounting) and match the right elements together.
🤔 Deduce if the project will be implemented if a simple voting procedure is used.
Is the project accepted?
🧮 Compute the sum of the three NPV (NPV for shareholder 1 + NPV for shareholder 2 + NPV for shareholder 3).