Corporate Finance

FI515_Homework1_SarahRasmovich
Chapter 1: miniskirt Case, pg 45-46
Chapter 2: pg 79 2.6, 2.7, 2.9
Chapter 1: Mini Case, pg 45-46
a) Why is corporate finance important to altogether managers?
merged finance is important to all managers because in order to be successful their keep company they must generate enough funds to compensate investors who provide the company with capital.
b) Describe the organizational haomas a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.
The organization forms a company may have as it develops be as follows:
Proprietorship
A proprietorship is a business owned by wiz person. Advantages of a proprietorship are: it is easy and inexpensive to form (business operations can start as soon as a city or advance business liberty is obtained); there is very few government regulations; and income is not consequence to corporate tax, instead its taxed as part of the owners personal income. Proprietorships also have limitations such as: obtaining capital in order to grow can be difficult; the owner is personally presumable for the businesss debts, which can result in losses that exceed the investment funds in the company; and the life of the business is modified to the life of the owner.




Partnership
A partnership is formed when two or more than people/entities conduct a noncorporate business for profit. Partnership agreements state how the profits and losses are shared between partners. Advantages and disadvantages are similar to a proprietorship. Partners can still lose all of the personal assets if losses occur because each partner is liable for the businesss debts. Partners can work up limited partnerships, which limits how such(prenominal) the partners can lose (limited partners can only lose the pith they invest, general partners have unlimited liability) or they can establish limited liability partnerships, where all losses are limited to the investment of each partner....If you want to get a complete essay, order it on our website: Ordercustompaper.com



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