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In: Finance

You were recently appointed to the board of directors for Dropbox. a. What are the main...

You were recently appointed to the board of directors for Dropbox.

a. What are the main responsibilities of the board of directors?

b. Suppose that Microsoft just approached Dropbox about acquiring it. You and the board decide to ght this takeover attempt. What tools could you use to deter Microsoft?

c. How does the Sarbanes-Oxley Act and the Dodd-Frank Act affect the board of directors at Dropbox?

d. Suppose that an activist investor at Dropbox is attempting to remove the board of directors. It would cost $500,000 today to start a proxy contest. There is a 15% chance of success, and the activist investor owns 7% of the company. There are 10 million shares outstanding. If the campaign succeeds, then the stock price increases by $10 after a full year. If it fails, then the stock price remains that same. Assume that the appropriate discount rate is 12%. Is this a positive NPV investment for the activist investor?

Solutions

Expert Solution

Since these are very detailed questions so i would be answering only the 1st part.

a. Main responsibilities of the board of directors are:

1) The board of directors is appointed to act on behalf of the shareholders to run the day to day affairs of the business.

2) The board are directly accountable to the shareholders and each year the company will hold an annual general meeting (AGM) at which the directors must provide a report to shareholders on the performance of the company, what its future plans and strategies are and also submit themselves for re-election to the board.

3) Determine the company's vision and mission to guide and set the pace for its current operations and future developmen

4) Determine and review company goals and company policies.

5) Review and evaluate present and future opportunities, threats and risks in the external environment and current and future strengths, weaknesses and risks relating to the company.

jeff jeffy answered 1 year ago
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