1. Explain why the valuation models for a perpetual bond, preferred stock, and com- mon stock with constant dividend payments (zero growth) are virtually identical.
2. Explain how the book value per share of common stock can change over time.
3. What is the difference between majority voting and cumulative voting?
4. What are the primary functions served by investment bankers?
5. What are the differences between a direct placement, a public cash offering, and a rights offering of securities?
6. Which do you think is more risky for a firm trying to raise capital-an underwritten offering or a best-efforts offering?
7. Identify the major issuance costs associated with a security offering by a corporation.
8. How does a shelf registration differ from other public security offerings?