In finance, a Class B share or Class C share is a designation for a share class of a common or preferred stock that typically has strengthened voting rights or other benefits compared to a Class A share that may have been created.[1] The equity structure, or how many types of shares are offered, is determined by the corporate charter.[2]
B share can also refer to various terms relating to stock classes:
- B share (mainland China), a class of stock on the Shanghai and Shenzhen stock exchanges[3]
- B share (NYSE), a class of stock on the New York Stock Exchange
Most of the time, Class B shares may have lower repayment priorities in the event a company declares bankruptcy. Each company’s classes of stock differs and more information is often included in the company’s prospectus. If held long term, Class B shares may also be converted to Class A shares.[4][5] There are also different reasons for creating Class B shares within a company—there are, however, similar arrangements which companies seem to use when it comes to equity structure.[6]
Class B common shares can be invested in through mutual funds, or through the public market (stock exchange). There are also Class B shares which are referred to as preferred shares in certain companies. Before investing in the shares, investors will look at different financial ratios which will help them value the share and aid in the decision of investing in the stock.[7][8]
- ^ Gad, Sham M. (2009). The Business of Value Investing: Six Essential Elements to Buying Companies Like Warren Buffett. Hoboken, NJ: John Wiley & Sons. pp. 214–216. ISBN 978-0-470-55385-5.
- ^ Pezzutti, Paolo (2008). Trading the US Markets: A Comprehensive Guide to Us Markets for European Traders and Investors. Petersfield, UK: Harriman House Limited. p. 52. ISBN 978-1-905641-05-5.
- ^ He, Yan (2006). "Chapter 15: Chinese A and B Shares". In Lee, Cheng-Few; Lee, Alice C. (eds.). Encyclopedia of Finance. New York: Springer Science & Business Media. pp. 435–436. ISBN 978-0-387-26284-0.
- ^ Hayes, Adam (2022). Anderson, Somer (ed.). "Class B Shares Definition". Investopedia.
- ^ "Empire State Realty Trust Registration Rights Agreement". Law Insider. 2013.
- ^ Wilkins, Glenn (2022). Yashina, Natalya (ed.). "6 Basic Financial Ratios and What They Reveal". Investopedia.
- ^ Maverick, J.B. (2022). Brock, Thomas (ed.). "Class A Shares vs. Class B Shares". Investopedia.
- ^ McGowan, Lee (2022). Scott, Gordon (ed.). "What Are Mutual Fund Class B Shares?". The Balance.