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http: /courses aplia com af servlet/quiz quiz_action-take uz&quiz; Aplia: Student Question eEconomics question Chegg c Previous Net2 Options X Find: Previous Next Options aplia Dyer, FINK 301 Prin Fin Mgmt Spring 2016 yassine hicham Sign Out Customer Support Home Grades Personalized Reviews Discussion Course Materials Stocks (Equity) - Characteristics and Valuation Graded Assignment | Read Chapter 7 | Back to Assignment Due Wednesday 04.13.16 at 10:45 PM Attempts: Keep the Highest: /2 5. Types of common stock Aa Aa In some cases, individuals who start a business have special voting rights that help them exercise more control over the firm. They own a special class of stock called shares. Consider this case: When Google went public, it issued Class B shares that had 10 votes per share as compared to Class A shares that had 1 vote per share. Class B shares were sold to the founders, executives, and insiders in the company Source: "Google 2004 Annua Report,on Google Investor Relations, http://investor.google.com/pdf/2004_AnnualReport.pdf Based on this example, which of the following statements is true? Classified stock is not issued to give more votes per share to founders of the firm Classified stock is issued to give more votes per share to the founders of the firm Flash Player WIN 20,0,0,228 03 3.34 2004-2016 Aplia. All rights reserved. © 2013 Cengage Learning except as noted. All rights reserved. Grade It Now Save & Continue Session 59:42 Timeout 12:41 PM 4/8/2016Explanation / Answer
They own a special class of stock called classified shares.
For executing the special voting rights, the shares must be in equity class and have special classification of voting right. Example: 1 share has 10 voting rights. Such classification indicates the classified shares.
True: Classified stock is issued to give more votes per share to the founders of the firm.
Class B shares have special voting rights. These are issued to the founders. Therefore, classified stock has been issued to the founders.
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