Asked by Yamile Espinosa on Jul 26, 2024
Verified
Which of the following is true of non-voting common stock?
A) It is not legal in Canada to issue common stock without voting rights.
B) A "coattail" provision requires that 2/3 of all common stock carry voting rights.
C) Non-voting common stockholders must be paid a dividend each year.
D) Non-voting shares must receive dividends no lower than dividends on voting shares.
E) Non-voting shares commonly sell at a premium over voting shares.
Non-Voting Common Stock
Shares that give the shareholder ownership rights in a company but do not grant voting power in corporate decisions.
Coattail Provision
A clause in a shareholder agreement protecting minority shareholders by enabling them to join in the sale of a company if a majority shareholder sells their stake.
Voting Rights
The rights of shareholders to vote on corporate matters, such as the election of board members or significant corporate actions, proportional to their share ownership.
- Understand the importance of dual class stock and non-voting shares in terms of governance and decision-making in a corporation.
Verified Answer
Learning Objectives
- Understand the importance of dual class stock and non-voting shares in terms of governance and decision-making in a corporation.
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