Skip to content

CS Professional · Strategic Management and Corporate Finance · Real Estate Investment Trusts

A REIT has 2,00,00,000 units outstanding. A resolution requiring approval by unitholders is put to vote and 1,20,00,000 units vote in favour and 60,00,000 units vote against, with the rest not voting. Taking the voting only on votes cast, what percentage of votes cast is in favour, and does it satisfy a simple majority requirement of votes cast?

Votes cast total 1.8 crore units, of which 1.2 crore are in favour, giving 66.67% of votes cast. That exceeds fifty percent, so a simple majority of votes cast is satisfied. Using total outstanding units as the base wrongly gives 60%.

  1. A60%; yes
  2. B66.67%; yesCorrect
  3. C60%; no
  4. D50%; no

Explanation

Votes cast = 1,20,00,000 + 60,00,000 = 1,80,00,000. In favour = 1,20,00,000 / 1,80,00,000 = 66.67%. This exceeds 50%, so a simple majority of votes cast is met. The 60% option wrongly uses total units (1.2 crore / 2 crore) as the base.

Did you get it right without looking?

One question tells you little. A timed set on Real Estate Investment Trusts shows your real accuracy, how long you take and where you lose marks.

Practise Real Estate Investment TrustsFree diagnostic mock

More Real Estate Investment Trusts questions