There are two conflicting hypotheses regarding the effect of dual-class recapitalizations. One holds that the shareholders with voting rights improve the position of all shareholders because of their ability to negotiate a better takeover price. The other contends that the recapitalization can...

"Whether firms pursue shareholder value maximization or the maximization of stakeholder welfare is a controversial issue whose outcomes seem irreconcilable. We propose that firms are likely to compensate their executives for pursuing the firm's goal be it shareholder value maximization or the...