Pls do not handwrite the answer, this is for easy reading Question 4:- a) Dual c
ID: 1175434 • Letter: P
Question
Pls do not handwrite the answer, this is for easy reading
Question 4:-
a) Dual class shares involve two classes of shares which have different voting rights. For example, 1 class A share carries1 vote while 1 Class B share carries 10 votes. Examples of dual class shares include Facebook. Recently, the SGX announced that it would allow companies having dual class shared to be listed. Analyse why an investor is willing to buy shares that carry lower voting rights? List 2 example to support answer.
Explanation / Answer
Generally shares with more voting rights cost more than the shares with lower voting rights. Also, an investor who is willing to buy shares that carry lower voting rights usually receives higher dividend to compensate for the lower voting rights. Also for investors who are investing in a company for dividend would generally prefer these type of shares.