Outline the three different classes of common stock voting rights available and describe the benefits and drawbacks of each from the standpoint of...

1. Outline the three different classes of common stock voting rights available and describe the benefits and drawbacks of each from the standpoint of the corporation and the investor. (9 marks)

2. Describe and explain the following terms (6 marks): a. Sinking Fund b. Protective covenants c. Junk bonds

3. Rank the following sources of capital for a typical corporation from the most desirable to the least: IPO, Private Placement, and Retained Earnings. Explain you selection. (6 marks)

4. Outline the potential benefits and drawbacks of a pay for performance compensation package for executives of public corporations. (4 marks)

5. Explain the relationship between default risk and bond ratings. (2 marks)

6. Explain what an asset backed bond is and provide an example. (2 marks)