Corporate Finance, Module 12: “Corporate Financing”
    
Homework Assignment

(The attached PDF file has better formatting.)

The textbook says that stockholders have control rights and residual cash flow rights.

A.    How do shareholders exercise their control rights?
B.    How are their control rights constrained by the firm’s management?
C.    Why are their cash flow rights termed residual?
D.    Why might you prefer to be a bondholder during recessions and a shareholder during boom years?