Classified stock differentiates various classes of common stock.Using it is one way companies can meet special needs,such as when owners of a start-up firm need additional equity capital but don't want to relinquish voting control.

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This statement is true. Classified stock allows companies to create different classes of common stock with varying rights and privileges, such as voting rights and dividend preferences. This can help companies meet specific financing or ownership needs. One example is when founders of a start-up company want to raise additional capital but maintain control over the decision-making process, they may issue a class of non-voting stock to new investors.

Classified Stock Differentiates Various Classes of Common Stock