Question: Dual classes of common stock are common in a number of countries. Assume that Yehti Manufacturing has the following capital structure at book value. The A-shares have ten votes per share adn the B-shares have one vote per share.
| Yehti Manufacturing |
Local Currency (millions) |
| Long-term debt |
200 |
| Retained earnings |
300 |
| Paid-in common stock: 1.0 million A-shares |
100 |
| Paid-in common stock: 4.0 million B-shares |
400 |
| Total long-term capital |
1,000 |
a. What proportion of the total long-term capital has been raised by A-shares?
b. What proportion of voting rights is represented by A-shares?
c. What proportion of the dividends should the A-shares receive?