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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Definitions:

Service Department Costs

Expenses associated with the departments that do not directly produce goods but provide support services to production departments, influencing the overall cost of operations.

Geriatric Medicine

A branch of medicine focusing on health care for elderly people, aiming to promote health by preventing and treating diseases and disabilities in older adults.

Personnel Costs

Personnel costs refer to the expenses associated with employing staff, including wages, benefits, training, and other related costs.

Weighted-Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale.