The holders of a class of stock will not receive dividends until the company establishes its earning power by building up retained earnings to a designated level.

The correct answer is founders' shares.

Explanation:

The founder's shares are those issued to the founder of a firm by leaving control of it as part of the purchase agreement offered by the company that acquires it.

In commercial law, shares are called securities that represent equal fractions of the corporate capital of the companies and that are quoted and transferred in the stock markets. They can be nominative or bearer and are called released or not released, depending on whether or not their total amount was satisfied. There are actions of the founder, which imply special rights for its holders; Preferred shares, which receive a fixed interest or higher than ordinary interest, and industry shares, shareholders.

Ordinary Stock

Explanation:

Ordinary stock also known as common stock is the type of equity instrument that is subordinate to all other types of shares. The holder of ordinary stock participates entity's profits or receive dividends only after all other types of equity shares have received their dividends. And is worth knowing that ordinary stock holders do not receive a fixed rate of dividend rather their dividends depends on the profit declared by the company.

Shareholder of ordinary stock may only receive dividends declared by the issuing company's board of directors.

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