The Board Approves a Proposed Amendment to Deny Existing Preemptive

question 52

Multiple Choice

The board approves a proposed amendment to deny existing preemptive rights to Class A preferred, and to issue stock in a new Class D preferred that would be accorded liquidation preference after all other classes of preferred stock. Preferred Classes B and C would remain the same. Which of the following would be true?

• A) Only Class B and C shareholders vote.
• B) A majority of Class A, B, and C shareholders all together would be needed to pass the amendment.
• C) Class B and C shareholders would not be entitled to vote at all.
• D) Class A and C shareholders would vote together.