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 each have ten votes and the B-shares each have one vote per share.

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?

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Yehti Manufacturing Long-term debt Retained earnings Paid-in common stock: 1 milon A-shares Paid-in common stock: 4 milion B-shares Local Currency (millions) 200 300 100 400 1,000 Votes per share Total Votes 10.00 1,000 1.00400 400 Total long-term capital 1,400