Fin 515 Week 1 Homework Essay Example
Running head: Week 1 Assignment
Week 1 Assignment:
Mini Case (p.45)
Problems (p.79)
Alisha Clarke
Managerial Finance
Week 1 Assignment
Professor Gaggar
September 9, 2012
a) Why is corporate finance important to all managers?
Corporate finance is important because it enables managers to have an understanding of what funds would be necessary for upcoming projects and projects of their company as well as allowing them to plan ahead.
b) Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.
When a company is evolving from a start up to a major corporation, it will probably have to grow through the stages of sole proprietorship, partnership, and then a corporation. A sole proprietorship has advantages such as being easily and inexpensively formed and has to deal with less regulation by the government. Some of the disadvantages of a sole proprietorship include difficulties with obtaining capital to enable. The life of a cole proprietorship is limited to the life of the owner Some of the advantages to a partnership are similar to that of a sole proprietorship, however there is more of a liability placed on partnerships because they are responsible for the company’s debt. When it comes to a corporation, the advantages included the unlimited life of the company despite the death of the owners. Also, there is also limited liability. Unfortunately, corporations are subject to double taxation and have to follow many government regulations.
c) How do corporations go public and continue to grow? What are agency problems? What is corporate governance?
Corporations sell stock to the public to help the firm grow. A corporation’s ability to grow depends on its interaction with financial markets when ti comes to borrowing capital, investing, and selling stock. An agency problem happens when the stockholders are partial owners to a
Week 1 Assignment:
Mini Case (p.45)
Problems (p.79)
Alisha Clarke
Managerial Finance
Week 1 Assignment
Professor Gaggar
September 9, 2012
a) Why is corporate finance important to all managers?
Corporate finance is important because it enables managers to have an understanding of what funds would be necessary for upcoming projects and projects of their company as well as allowing them to plan ahead.
b) Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.
When a company is evolving from a start up to a major corporation, it will probably have to grow through the stages of sole proprietorship, partnership, and then a corporation. A sole proprietorship has advantages such as being easily and inexpensively formed and has to deal with less regulation by the government. Some of the disadvantages of a sole proprietorship include difficulties with obtaining capital to enable. The life of a cole proprietorship is limited to the life of the owner Some of the advantages to a partnership are similar to that of a sole proprietorship, however there is more of a liability placed on partnerships because they are responsible for the company’s debt. When it comes to a corporation, the advantages included the unlimited life of the company despite the death of the owners. Also, there is also limited liability. Unfortunately, corporations are subject to double taxation and have to follow many government regulations.
c) How do corporations go public and continue to grow? What are agency problems? What is corporate governance?
Corporations sell stock to the public to help the firm grow. A corporation’s ability to grow depends on its interaction with financial markets when ti comes to borrowing capital, investing, and selling stock. An agency problem happens when the stockholders are partial owners to a