- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 3. Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
- Subject 1. Shareholder Conflicts and Management
CFA Practice Question
True or False? Company A has two classes of shares: preferred shares and common shares. Preferred shareholders don't have any voting rights. The ownership structure of this company indicates a weak corporate governance practice.
Correct Answer: False
Preferred stock does not usually have voting rights. Preferred shareholders have priority over common stockholders on earnings and assets in the event of liquidation. Concerns about ownership structure refer to issues regarding common shares.
User Contributed Comments 4
| User | Comment |
|---|---|
| gulfa99 | the probability of picking the right answer is 50:50. I was not lucky |
| papajeff | If not knowing the difference between common and preferred shares is unlucky.....yeah, tough break. |
| gill15 | if this Q actually required 50:50 then I would agree with you... You would not be elected by the nomination board... |
| davidkhang | LOL... this was too funny not to comment. |