You are the manager of a pension fund and one of your staff comes to you to review a potential investment in the Class B shares of Palm Inc. When you are reviewing the shareholders’ equity of the company you noted the following.

Issued shares:

Class A multiple voting shares—Holders of the multiple voting shares are entitled to 10 votes per multiple voting share.

Class B subordinate voting shares—Holders of the subordinate voting shares are entitled to one vote per subordinate voting share.

Required 

Explain why you might be concerned about the presence of the Class A shares. Quantify your concerns where possible.

Transcribed Image Text:

Class A multiple voting shares Class B subordinate voting shares Number 6,300,000 Number 2,500,000 $25,000,000 $105,000,000