Week 13 - Classes of Shares Flashcards
1
Q
Articles may specify…
A
Classes of shares with different rights
2
Q
A company might choose to issue:
A
- ordinary (equity) shares
- preference shares
- redeemable shares
3
Q
Ordinary (equity) shares
A
- carry the greatest risk
- potential to get greatest return however
4
Q
Why use different classes?
A
- Makes the company harder to be taken over
- Can be used to reward advisors
5
Q
Who are redeemable shares often given to and why?
A
Employees - redeemable means the company retains a right to request them back and reimburse the shareholder if needed
