FI515 Managerial Finance
a. Corporate finance is important to managers because successful companies have enough funding to run for their plans and support their operations. Most companies need cash to purchase land, buildings, equipment, and materials. Companies heap reinvest a portion of their earnings, but most growing companies must(prenominal) also raise additional funds externally.
b. Most companies down as ownerships which is an unincorporated business owned by whizz individual. The proprietorship has three important advantages, one it is easily and cheaply formed, two it is type to few regulations, and three its income is not subject to corporate taxation but is taxed as part of the proprietors personal income. The proprietorship also has limitations, one it may be difficult for a proprietorship to obtain working capital needed for growth, two the proprietor has un exceptional personal obligation for the businesses debts which can result in loses that exceed the money invested in the company and three the life of a proprietorship is limited to its founder. As the business grows it may develop into a partnership. A partnerships advantages and disadvantages are generally the same. AS a partnership grows it typically develops into a corporation.
The advantages are one unlimited life, two blue transferability of ownership, and three limited liabilities. The disadvantages are one that earnings may be subject to double taxation, and two assembleting up a corporation involves preparing a chapter, writing a set of bylaws, filing the many required state and federal reports, which is more(prenominal) complex and time-consuming than creating a proprietorship or partnership.
c. Companies watch to grow and go in the public eye(predicate) by having an initial public offering (IPO). This helps them raise additional capital that can be used to expand. Agency problems are what it takes to stop managers from acting in their best interest, rather than in the best interests of the...If you want to bum about a full essay, order it on our website: Orderessay
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