CFA Practice Question

There are 233 practice questions for this study session.

CFA Practice Question

Which statement is false?

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.
Correct Answer: C

Statement C is false. This is due to the inherent design of their unequal voting rights.

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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