CFA Institute Sustainable-Investing Question Answer
Which of the following most likely protects minority shareholders?
A.
Dual-class shares
B.
Pre-emption rights
C.
Double voting rights
The Answer Is:
B
This question includes an explanation.
Explanation:
Pre-emption rightsgiveexisting shareholders priority when new shares are issued, preventingdilutionof their ownership stakes. This isa key protection for minority shareholders.
Dual-class shares (A) and double voting rights (C) favor controlling shareholders, reducing minority shareholder influence.
[References:, OECD Corporate Governance Principles, CFA Institute Minority Shareholder Protection Report, UK Companies Act on Pre-Emption Rights, ========, , ]
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