Conversion rights
A)specify the order in which classes of stockholders are paid upon dissolution.
B)are designed to prevent dilution of a shareholder's ownership in the company.
C)allow investors to convert to a different class.
D)establish whether shareholders are entitled to dividends.

Question

Quizplus · Accepted Answer

Conversion rights allow investors to convert their shares from one class to another. This may allow them to benefit from different dividend payouts or other rights associated with a different class of stock. Conversion rights do not relate to payment priority upon dissolution or dilution protection.

Conversion Rights