Different Classes of Stock Usually Are Issued To

question 40

Multiple Choice

Different classes of stock usually are issued to:

• A)maintain ownership control by holding the class of stock with greater voting rights.
• B)pay less in dividends between the classes of stock.
• 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 stockholders knowing.
• E)None of the above.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is globally accepted for preparing financial statements.

Balance Sheet Order

The sequence in which assets, liabilities, and equity are presented in the balance sheet, typically starting with current assets and liabilities.

Noncurrent Assets

Long-term assets that are not expected to be converted into cash within one year or the operating cycle, such as property, plant, and equipment.

IASB and FASB

International Accounting Standards Board and Financial Accounting Standards Board, respectively, setting and promoting accounting standards.