When comparing common stock of the same company, it is fair to say that
A) all shares, no matter how many classes, are all created with the same equal rights.
B) companies sometimes have two different classes of shares with unequal rights to dividends and votes.
C) the Securities and Exchange Commission allows only one class of common stock.
D) investors are indifferent between class A and class B shares.

Question

Quizplus · Accepted Answer

Companies can have different classes of common stock with different rights, such as voting rights or dividend payments. This is specifically allowed and regulated by the Securities and Exchange Commission. Therefore, option B is the most accurate statement. Options A and C are incorrect as they are not accurate statements about common stocks. Option D is also incorrect, as investors may have preferences for one class of shares over another, depending on their investment goals and the company's specific characteristics.

When Comparing Common Stock of the Same Company, It Is