Multiple classes of stock are primarily created to
A)allow certain shareholders to retain control of a firm.
B)replace cash dividends with share repurchases.
C)allow common stock to have cumulative privileges.
D)eliminate pre-emptive rights.
E)ensure all shareholders have equal rights.

Question

Quizplus · Accepted Answer

Multiple classes of stock allow certain shareholders (usually founders or executives) to retain control of a firm by holding shares with higher voting rights. This is known as a dual-class stock structure.

Multiple Classes of Stock Are Primarily Created to