MultiProducts, Inc. has two classes of common stock. Class A has 1 million shares with 10 votes per share. Class B has 2 million shares with 1 vote per share. If the dividends per share are equal for both class A and B stock, then Class A shareholders have ________ of the votes and ________ of the dividends.

Question

Quizplus · Accepted Answer

Class A shareholders have 10 million votes (1 million shares * 10 votes), and Class B shareholders have 2 million votes (2 million shares * 1 vote), totaling 12 million votes. Class A thus has 83.33% of the votes (10 million / 12 million). Since dividends per share are equal, Class A receives 33.33% of the dividends (1 million shares / 3 million total shares).