Definition:
B shares are a type of common stock that have fewer voting rights compared to A shares. They are often issued by companies to raise capital while maintaining control of the company.
Key characteristics of B shares:
- Fewer voting rights: B shares typically have fewer voting rights than A shares, meaning that holders of B shares have less influence over the company’s affairs.
- Dividends: B shares often have the same dividend rights as A shares.
- Conversion rights: In some cases, B shares may have the right to be converted into A shares after a certain period of time.
Why are B shares issued?
- Control: Issuing B shares can allow a company to raise capital while maintaining control of the company.
- Incentives: B shares can be used as an incentive for employees or other stakeholders.
- Flexibility: B shares offer flexibility in terms of voting rights and other features.
However, it’s important to note that B shares may be less desirable to investors due to their limited voting rights.
In essence, B shares are a type of common stock with fewer voting rights than A shares, and they are often used by companies to raise capital while maintaining control.
