Question

4. What is a dual-class firm? Why do firms typically issue dual classes of common stock?

9. What is a market order? What is a limit order? How are each executed?

17. Describe the three forms of stock market efficiency.

5. Refer to the stock market quote in Table 8–1 (Links to an external site.)Links to an external site..

1. What was the closing stock price for Abbott Laboratories on July 7, 2016?

2. What were the high and low prices at which McDonald’s traded between July 7, 2015, and July 7, 2016?

3. What was the dividend yield on Waste Management stock as of July 7, 2016?

Answer 1

4 Ans

The equity share holders have the following characteristics

• They are the owners of the company in relation to their share holding
• They are eligible to receive dividends
• They have the voting rights in shareholders AGM and other meetings

Dual class firms issued common equity shares into two categories

• The class A shares where the voting rights are higher means I share can be equal to 5 votes
• The class B shares where the voting rights are 1 or can be zero

The promoters of the company wants to have control on the company issues dual class shares as the voting rights plays an important part Annual general meetings of the shareholders