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 Class A shares and other common shares of company's ...

    Discover how a company can break down its common stock into multiple classes and how these classes differ from one another ... Read Answer >>
  2. The difference between Berkshire Hathaway's Class A and Class B shares

    Price is the primary difference between Berkshire Hathaway's Class A stock and Class B stock, but there are other distinctions. ... Read Answer >>
  3. How are a mutual fund's C shares different from A and B shares?

    Learn how a class C share differs from a class A or B share in relation to a mutual fund. Read Answer >>
  4. Do convertible bonds have voting rights?

    Convertible bonds usually have no voting rights until they are converted. Even after conversion, they may not be granted ... Read Answer >>
  5. Do Shareholders Get a Say in a Firm's Operation?

    Stock ownership often provides a vote on board membership and other issues put out for shareholder approval. Read Answer >>
  6. Why doesn't Warren Buffett split Berkshire Hathaway stock?

    Warren Buffet's fundamental approach to investing explains his no-split policy on Berkshire Hathaway stock. Read Answer >>
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