Write a coherent essay on the complexity of capital structure (approx 5 pages): (i) All equity shares are not equal (dual class shares, ADR (levels 1, 2, 3), privately held shares, preferred stock,...

An Introduction
The equity shares have wide range of characteristics and it plays an important role in the determination of the value and the rights which the owner can exercise in relation with the ownership. Similarly the debt of the entity is having the wide range of characteristics and it plays an important role in the determination of the value and the terms of the payment of the debt and in terms of the repayment of the debt.
(i) All equity shares are not equal (dual class shares, ADR (levels 1, 2, 3), privately held shares, preferred stock, callable/puttable shares, etc.)
A dual class stock can be understood as the various types of the shares by the single entity. The Dual class stock structure consists of Class A and Class B shares. In addition to this when multiple shares are issues then one class share is for the general public and the other share is for the founders and executive of the entity. Moreover the entity having dual structure has two or more class of shares which are having different voting right for each class of share. However this share structure is controversial as they do not allow public shareholding equal right in the entity (Harness, Jill).
An ADR is the certificate which represents the shares of foreign entity stock kept in a bank within the United States denominated in U.S. dollars. The ADR listed as a level 1 issue needs the minimum amount of compliance and regulatory oversight. On the other hand the entities issuing level 2 ADRs needs to fulfill all the registration with the SEC and reporting requirement imposed on them. The level 3 issues are same as of level 2 but the entities which issue level 3 ADRs can also raise capital by public offerings within the United States.
On the other hand other type of share is privately held shares and these shares are not traded to the public by means of stock exchange. In addition to this these shares requires private transactions as per the rules and regulation of the country. The preferred or special stock entitles the shareholders with the special right or priority in regarding with the participation in the profit of the entity and on the other hand the shareholder with preferred stock forgoes vote or otherwise controlling the entity. In other words preferred stock is the type of stock which is having the combined feature which is not possessed by the common stock of both the instruments i.e. debt and equity....