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descriptionIssue Brief
Posted on: 12/05/2025
Your Piece of the Pie: Understanding the Valuation Impact of Multiple Share Classes
Why do companies end up with multiple classes of equity? Sometimes the reason is financing. Other times, it’s a management incentive. Yet another reason is to give some shareholders greater voting or control rights.
Whatever their purpose, the fair value of alternate share classes is a challenge to measure. In this issue brief—originally published in 2016 and newly updated for 2026—we look at shares that bestow different economic rights, then present two ways to allocate value between multiple classes of equity.
