Different Classes of Shares Usually Are Issued To

question 22

Multiple Choice

Different classes of shares usually are issued to:

• A)maintain ownership control by holding the class of equity with greater voting rights.
• B)pay less in dividends between the classes of equity.
• C)fool investors into thinking that equity is equity and there is no difference in control or
• Value features.
• D)extract perquisites without the other class of shareholders knowing.
• E)None of the above.

---

Definitions:

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income, often seen in international business or when corporate income is taxed both at the corporate and personal levels.

Preferred Stock

Preferred stock is a type of stock that provides dividends before any dividends are paid to common stockholders and typically does not confer voting rights, offering a blend of stock and bond features.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Sole Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.