August 1, 2018

Dual-class shares: the good, the bad and the ugly

A Review of the Debate Surrounding Dual-Class Shares and Their Emergence in Asia Pacific

Mary Leung and Rocky Tung | CFA Institute

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Following an examination of Canadian industrial companies, Allaire (2016) suggested that financial performances of these Canadian DCS companies would outperform the peers over 5-, 10-, and 15-year periods (see Exhibit 1). Allaire considered that the superior financial performance would help these firms maintain their headquarters in Canada and argued that such share structures help important Canadian industrial players fend off hostile takeovers, especially when the country’s currency is weak (e.g., in the early 2000s).

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