If a firm has class A and class B common stock outstanding, it means that ________.
A) each class receives a different dividend
B) the par value of each class is different
C) the dividend paid to one of the classes is tax deductible by the corporation
D) one of the classes is probably nonvoting stock

Question

Quizplus · Accepted Answer

Having class A and class B common stock outstanding typically means that one of the classes is nonvoting stock. This allows the corporation to maintain control while still allowing for public investment. The other answer choices are not necessarily true for all situations of having multiple classes of common stock.

If a Firm Has Class a and Class B Common