Some Corporations Issue Dual Classes of Stock with Unequal Voting

question 34

Multiple Choice

Some corporations issue dual classes of stock with unequal voting power. One justification offered by supporters of the dual class system is that it _____.

• A) favors long-term business health over short-term profits
• B) is more democratic than most single class systems
• C) is more positively correlated with business success than are other systems
• D) induces a greater number of investors to purchase stock in the firm

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