Some corporations issue dual classes of stock with unequal voting power. One justification offered by supporters of the dual class system is that it _____.
A) favors long-term business health over short-term profits
B) is more democratic than most single class systems
C) is more positively correlated with business success than are other systems
D) induces a greater number of investors to purchase stock in the firm

Question

Quizplus · Accepted Answer

Supporters of dual class stock argue that it allows founders and other long-term, committed shareholders to have more influence over the company's direction, which can help support long-term business health over short-term profits.

Some Corporations Issue Dual Classes of Stock with Unequal Voting