Question

True or False: In some cases, individuals who start a business have special voting rights that help them exercise more control over the firm. They own a special class of stock called founders’ shares. True False

Answer 1

Answer:

The correct answer is true.

Explanation:

Founders' share is the stock issued to the founders of the company. These stocks are different from the usual common stocks in the sense that the founder's shares are only at par. It also comes with a vesting schedule which gives a firm the right to buy back unvested shares. Founders shares does not receive any returns till a dividend is payable to the stockholders.