If a Company Offers More Than One Class of Stock

question 20

Multiple Choice

If a company offers more than one class of stock, corporate governance experts feel that _____.

• A) this is more democratic since some shares are more expensive than others
• B) this is preferable in order to provide a special class of nonvoting stock to executives
• C) super-voting power allows for the election of directors that benefit a specific class of stock
• D) decisions made by the dual class system are more advantageous for the average investor

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Definitions:

Cessation

The process of ending or being brought to an end.

Breathing

The process of inhaling oxygen and exhaling carbon dioxide from the atmosphere.

Epiglottis

A flap of cartilage located at the root of the tongue, which is depressed during swallowing to cover the opening of the windpipe.

Trachea

The windpipe, a large airway that leads air in and out of the lungs.