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Basic Question 9 of 9
Which statement is false?
B. Separating economic ownership from control is a sign of weak corporate governance.
C. It's possible for outside investors to dismantle dual-class structures.
A. The lack of voting power in a dual-class structure is usually well-disclosed, and is associated with a slightly lower stock price.
B. Separating economic ownership from control is a sign of weak corporate governance.
C. It's possible for outside investors to dismantle dual-class structures.
User Contributed Comments 1
| User | Comment |
|---|---|
| littlecow | Dual class stock structures are actually controversial. Supporters feel that the structure allows strong leadership to put long-term interests first while seeing beyond the near-term financial situation. Opponents feel it allows a small group of privileged shareholders to maintain control while other shareholders (with less voting power) provide the majority of the capital. |
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Learning Outcome Statements
describe the principal-agent relationship and conflicts that may arise between stakeholder groups
CFA® 2024 Level I Curriculum, Volume 2, Module 3.