Loading...
CFA Level 1
Equity Investments

Implications of Dual-Class Share Structures on Common Shareholders

Very Hard Equity Markets And Instruments Common Shares

Consider a newly publicly traded company, Tech Innovations Inc., which has issued common shares to raise capital. The company decides to adopt a dual-class share structure. In this structure, Class A shares have enhanced voting rights, whereas Class B shares have diminished voting rights but are offered at a premium to attract different types of investors. As an investor analyzing Tech Innovations Inc., consider how this structure might affect various characteristics of the common shares.

Which of the following statements best describes the implications of a dual-class share structure for common shareholders?

Hint

Submitted13.8K
Correct11.1K
% Correct80%