Why do companies use A & B shares?
There are several reasons why companies use A & B shares:
To ensure control of the company: By owning a majority of A shares, a company can ensure that they have control over the general meeting and thus over the company's management.
To attract investors: B shares can be attractive to investors who want a higher dividend yield or other benefits, even if they have limited or no voting rights.
To create a more flexible capital structure: By using A & B shares, companies can tailor their capital structure to their specific needs.
What are the advantages and disadvantages of A & B shares?
Advantages:
For A shareholders: Ensures control over the company, provides full voting rights.
For B shareholders: Can provide a higher dividend yield or other benefits.
For companies: Provides more flexibility in the capital structure, can attract investors.
Disadvantages:
For A shareholders: May have a lower dividend yield.
For B shareholders: Have limited or no voting rights.
For companies: May lead to conflicts of interest between A and B shareholders.
