Companies Can Issue Different Classes of Common Stock

question 58

Multiple Choice

Companies can issue different classes of common stock. Which of the following statements concerning stock classes is most correct?

• A) All common stocks fall into one of three classes: A, B, and C.
• B) Most firms have several classes of common stock outstanding.
• C) All common stock, regardless of class, must have voting rights.
• D) All common stock, regardless of class, must have the same dividend privileges.
• E) None of the statements above is necessarily true.

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Definitions:

Softwood Lumber

Wood derived from coniferous trees, often used in construction, known for being lighter and less dense than hardwood.

Assignment

The transfer of a right, property, or debt from one party to another, including contractual rights or obligations.

Contract

An agreement between two or more entities that holds legal validity and can be enforced in a court of law.

Restrictive Covenant

A clause in a deed or lease that limits how the property can be used, often to maintain the value or character of the land.