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The Washington Post Company's ownership structure. They have two classes of stock, one of which has super voting, meaning one class of shareholders has more say than the other class. Do you think this is a smart structure? What are the advantages and disadvantages of this structure?​

Respuesta :

I think two classes of stock is a smart structure.

Advantages of the two classes of stock

  • It protects the firm against a hostile takeover
  • It gives management greater ability to make decisions.

Disadvantages of the two classes of stock

  • Ordinary shareholders have a limited ability to effect changes in the firm.

A dual share class structure is when there are two classes of stock: the owners and management have greater voting rights while the shareholders have a limited voting right. This structure prevents the firm against a hostile takeover.

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