Dual class share structures allow companies to issue shares with different voting rights, impacting control and corporate governance. Class A shares typically have one vote per share and are publicly traded, while Class B shares offer multiple votes and are often held by founders or executives. This system affects decision-making, investor confidence, and the valuation of companies. Understanding its benefits and risks is crucial for stakeholders.
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Dual class share structures involve issuing different classes of shares with distinct voting rights and dividend policies
Dual class share structures allow companies to access public capital markets while maintaining control for original stakeholders
Dual class share structures raise concerns about equitable treatment of shareholders and potential misuse of power by those with disproportionate voting rights
Dual class shares are categorized into Class A and Class B, with Class A shares having standard voting rights and Class B shares having enhanced voting power
The dual class structure can significantly affect corporate governance by concentrating power in the hands of a few
Agency theory suggests potential conflicts of interest, while stewardship theory argues for potential long-term benefits
Valuing companies with dual class shares requires a specialized approach that considers the distinct characteristics of each class
Dual class share structures are based on principles such as differential voting rights, control retention, equitable treatment, and reduced stock price volatility
00
In a ______ ______ ______ structure, companies issue shares with different ______ rights and ______ policies.
dual class share
voting
dividend
01
While Class A shares typically have one ______ per share and are available to the ______, Class B shares come with multiple ______ and are often held by ______, family, or ______.
vote
public
votes
founders
executives
02
Trading status of Class A vs. Class B shares
Class A shares are publicly traded on stock exchanges; Class B shares are often not publicly traded.
