If a company offers more than one class of stock, corporate governance experts feel that _____.
A) this is more democratic since some shares are more expensive than others
B) this is preferable in order to provide a special class of nonvoting stock to executives
C) super-voting power allows for the election of directors that benefit a specific class of stock
D) decisions made by the dual class system are more advantageous for the average investor

Question

Quizplus · Accepted Answer

Corporate governance experts believe that offering multiple classes of stock can lead to super-voting power, which allows a specific class of stockholders to have more influence over the company's election of directors and decision-making. This can result in decisions that benefit that specific class of stockholders instead of the broader interests of all shareholders.

If a Company Offers More Than One Class of Stock