Evaluating Impacts of Share Restructuring at XYZ Corporation

Very Hard Equity Markets And Instruments Common Shares

When assessing the equity structure of a publicly traded company, understanding the distinctions between types of common shares is critical. XYZ Corporation recently announced a restructuring plan, affecting its common share framework. The company had previously issued two classes of common shares: Class A shares with enhanced voting rights and Class B shares with limited voting rights. Following the announcement, investors are concerned about the long-term implications of this restructuring on shareholder value and rights. As you analyze the situation, consider how different classes of shares may impact corporate governance, decision-making, and potential voting power during shareholders' meetings.

Given this context, which of the following statements is most accurate regarding the implications of the restructuring of XYZ Corporation's common shares?

Class A shares will ensure that those shareholders maintain greater influence over corporate decisions relative to Class B shareholders.

The restructuring will have no impact on the market price of Class B shares due to their limited voting rights.

The restructuring may lead to dilution of rights for Class A shareholders, as Class B shareholders gain equal voting parity.

Hint

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