Multiple Capital Structure

DEFINITION of 'Multiple Capital Structure'

The classification of a company's stock and bond offerings into different classes. Each class will have different characteristics in order to meet the needs of a wider range of investors than would be possible by issuing just one class of stock. The individual components have varying required rates of return affecting the weighted average cost of capital.

BREAKING DOWN 'Multiple Capital Structure'

For example, Berkshire Hathaway's common stock is divided into class A and class B shares. The class A shares (BRK.A) have more voting rights and can be converted to class B shares. The class B shares (BRK.B) have fewer voting rights and cannot be converted to class A shares. Class A shareholders have 0.5% of the voting rights that B shareholder do.

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RELATED FAQS
  1. What is the difference between Berkshire Hathaway's Class A and Class B shares?

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    Discover how a company can break down its common stock into multiple classes and how these classes differ from one another ... Read Answer >>
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  4. Why would a company have multiple share classes, and what are super voting shares?

    Firstly, do not confuse different classes of common stock with preferred stock. Preferred shares are an entirely different ... Read Answer >>
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