X Corporation has 2 classes of stock: Class A common stock and Class B common stock. Class A common stock does not provide voting rights and provides that dividends, as declared by the board of directors, will be declared in an amount equal to the dividends declared for Class B common stock. Furthermore, Class A common stock provides that, upon liquidation of X Corp., Class A common stock will split the liquidated net assets equally with Class B common stock. Class B common stock provides for voting rights and provides that dividends, as declared by the board of directors, will be declared in an amount equal to the dividends declared for Class A common stock. Furthermore, Class B common stock provides that, upon liquidation of X Corp., Class B common stock will split the liquidated net assets equally with Class A common stock. Which of the following, if any, is correct?

Multiple Choice

X Corporation can elect Subchapter S status even though it has two classes of stock because Subchapter S requirements allow for a maximum of 2 classes of stock.

X Corporation cannot elect Subchapter S status because it has two classes which violates Subchapter S requirements.

X Corporation cannot elect Subchapter S status because its two classes of stock vary as to voting rights.

X Corporation cannot elect Subchapter S status because its two classes of stock are entitled to the same amount of dividends and liquidated net assets.

None of the other choices are correct.