Just like sections on an airplane or levels of aristocracy, stocks can come in different classes. They describe different kinds of stocks, with varying rights and voting power. Typically, these classes get assigned letters to distinguish one from another: Class A, Class B, etc.
The exact distinctions between classes differs from company to company. There are no hard rules. However, a sample situation might go like this:
Class A stock has no voting rights, but receives a dividend. Class B stock doesn't receive a dividend, but holders get all the voting rights. This setup would allow original owners to issue themselves all the Class B stock early in the company-creation process. Then they can spread the Class A stock more widely.
In this scenario, owning Class A shares would let you participate in the economic benefits of the company (i.e. getting dividend payments). However, you don't have any say about the direction of the company. That right is reserved for the Class B owners.
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Finance: What is a Class Action Lawsuit?9 Views
Finance, a la shmoop. What is a class-action lawsuit? Okay there's a
class of victims wronged they took a drug that was supposed to grow hair on [People with beards looking angry]
their heads and it grew hair virulently only everywhere but their heads. All of
these victims gather their sufferings together and hire a team of lawyers who [Group of people putting money together]
then file as a class or group a lawsuit against the makers of that hair growth
drug who wronged them. Well that class action is done so that each individually
wronged, hairy person, doesn't have to separately hire their own lawyer and
file the expensive paperwork and so on to seek justice they wouldn't have been [Each person paying a seperate lawyer]
able to seek justice if each of them had to foot the bill for the likely 812
dollars in damages each, that doesn't buy you even a decent cup of coffee at a [The group are given bills by their lawyers]
lawyer's office for an initial set of meetings these days, so yeah instead with
a class-action lawsuit everybody's one consolidated class of plaintiffs and
when the suit is settled well they all share collectively in the booty and [Group of people looking and holding their money]
let's just hope that booty has been thoroughly waxed. [Man getting his butt waxed]
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