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:

Balance of Trade

The difference in value between a country's imports and exports over a certain period, reflecting the country's external trading position.

Goods Surplus

A situation in which the quantity of goods supplied exceeds the quantity demanded at a given price, often leading to price reductions.

Goods Exports

The process of exporting goods that are made within a country to different countries for the purposes of selling or trading.