Different Classes of Stock Usually Are Issued To

question 32

Multiple Choice

Different classes of stock usually are issued to:

• A)allow a certain group to maintain ownership control while reducing that group's equity position.
• B)reduce the firm's dividend obligation.
• C)fool investors.
• D)extract perquisites from one class of shareholders without the other class of shareholders knowing.
• E)distinguish the time periods in which the various shares were issued.

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Definitions:

Congress Enacted

Legislation that has been formally approved and established into law by the United States Congress.

Consumer Product Safety Commission

An agency of the U.S. government tasked with safeguarding the public against undue hazards of harm or mortality linked to consumer goods.

Federal Hazardous Substances Act

A US law regulating the labeling and packaging of hazardous substances to ensure consumer safety.

Open-Ended Credit

A revolving line of credit that allows a borrower to spend up to a certain limit, pay it off, and then borrow again.