A Corporation Currently Has Two Classes of Common Shares; Class

question 23

Multiple Choice

A corporation currently has two classes of common shares; Class A with 1 vote per share and Class B with 10 votes per share.The owners of the Class B shares have recently announced that all of their outstanding shares will be exchanged for Class A shares.Which of the following statements is true?

• A)The change will improve the corporate governance of the company.
• B)This is an example of convertible preferred shares.
• C)The company will pay a lower amount in dividends in the future.
• D)The change will decrease the legal capital of the company.

---

Definitions:

Housing Cost

The expense associated with acquiring, maintaining, or renting a residence.

Contract Remedies

Legal solutions available to a party of a contract when the opposing party has breached the agreement.

Contract Frustration

A legal doctrine which releases both parties from their contractual obligations due to unexpected events that render the contract impossible to fulfill.

Prize Horse

A highly valued or award-winning horse often recognized in competitive events or breeding.