It is further provided that all shares issued by management companies after the effective date of the act must be voting shares, and preferred shares are required to contain provisions transferring majority voting power to the holders of such stock in the event of default in the payment of dividends. 3. Adequate and Feasible Capital Structures The act restricts the amount of bonds and preferred stock which a closed-end management investment company may issue. Generally speaking, a closed-end investment company may not issue senior securities in an amount equivalent to more than 50 per cent of its assets. Only one class of bonds and one class of preferred stock may be issued. The asset coverage after issuance must be at least 300 per cent for debt securities and 200 per cent for preferred stocks, so that leverage at the time the senior securities are sold cannot be greater than indicated in the following table, assuming a capitalization of $1,000.


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