1. What are the different types of corporate debt obligations? Why is it useful for firms to have so many different types of debt options? If you were a CFO, what strategy would you use, having many of these or using just a few? Why?
2. Comment on the following statement: “ An investor who purchases the mortgage bonds of a corporation knows that should the corporation become bankrupt, mortgage bondholders will be paid in full before the common stockholders receive any proceeds.”
3. If Congress changes the tax law so as to increase marginal tax rates, what will happen to the price of municipal bonds?
4. a. What is a Build America Bond? b. What is the current status of the federal government program authorizing the issuance of such bonds?