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Question:

Consider the following statements:
Statement 1: Dual-class share structures can easily be changed over time.
Statement 2: Activist investors tend to have little impact on the company’s long-term investors.
Which of the following is most likely?

A Both statements are incorrect.
Explaination

Dual-share systems are virtually impossible to dismantle once they are in place. It is very important for long-term investors to consider how activist investors affect the company, as they can materially change a company’s strategic direction.