The Old Flyer Bus Company has both Class A and Class B shares. The class A shares have never paid a dividend, and there is no expectation that this will change in the future. These shares have voting rights of 10 votes per share. The class B shares have paid dividends in the past when declared by the board, and it is likely that this will continue.

The shares carry voting rights of one vote per share. Which shares would likely have a higher price? Why?

Answer rating: 100% (QA)

In general investors prefer shares that pay dividends over those that do not This is because dividen... View the full answer