Larry can invest in a different business that is offering class A shares to the general public while keeping the class B shares for company insiders. This will assist the company's founders in maintaining control. Transferring a vote to a different person or group of people in publicly traded enterprises. Therefore the statement is TRUE.
Individual L can invest in a different business that will sell Class A shares to the general public while Class B shares are kept by company insiders, assisting the founders in keeping control of the business.
Common stock is divided into numerous categories in order to draw in different types of investors. In general, Class-A shares are preferable over Class-B shares, however, on occasion, Class-B shares with founders' retention may have higher voting power.
The owners/founders differentiate according to the stage of the company's life cycle and the industry in which they operate in order to keep more control. At the same time, investors favor Class-A shares more. Thus, founders would be able to raise more money by maintaining the same voting power in both forms of shares.
As a result, the assertion is true.
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COMPLETE QUESTION:
Larry Nelson holds 1,000 shares of General Electric (GE) common stock. As a stockholder, he has the right to be involved in the election of its directors, who are responsible for managing the company and achieving the company's objectives.
True or False: Larry can invest in another company that is selling class A stocks to the public, and class B shares will be retained by company insiders. This will help the founders maintain control of the company.
False
True
