Often, a ﬁrm creates a second class of stock that has ___________ as compared with the ﬁrst class.

Question

Quizplus · Accepted Answer

A second class of stock often has unequal voting rights compared to the first class. This allows the founders or original owners to maintain control of the company while still raising capital by selling the second class of stock. The second class may have limited or no voting rights, giving the first class of stockholders more say in company decisions.

Often, a ﬁRm Creates a Second Class of Stock That