The board approves a proposed amendment to deny existing preemptive rights to Class A preferred, and to issue stock in a new Class D preferred that would be accorded liquidation preference after all other classes of preferred stock.Preferred Classes B and C would remain the same.Which of the following would be true?

Question

Quizplus · Accepted Answer

DClass A shareholders are directly affected by the amendment as it seeks to deny them existing preemptive rights, thus requiring their approval. Additionally, since Class C's liquidation preference is being altered by the introduction of a new class with preference after all other classes, they too would have a say in the amendment. Class B's position remains unchanged, so their inclusion in the voting process depends on the specific corporate governance rules and the nature of the amendment's impact on their rights. However, the question's phrasing suggests a scenario where both directly affected classes (A and C) would need to vote, making options A and D correct under the assumption that all classes impacted by changes in their rights or status would have a say.

The Board Approves a Proposed Amendment to Deny Existing Preemptive