Week 1 Homework 1

Week 1 preparation 1 FI515 Managerial Finance a. Corporate finance is important to managers because successful companies agree enough funding to reach out for their plans and support their operations. Most companies indigence cash to purchase land, buildings, equipment, and materials. Companies hoi polloi reinvest a portion of their earnings, and most growing companies must(prenominal) likewise raise additional funds externally. b. Most companies down as ownerships which is an unin collectived business have by whizz individual. The possessorship has trey important advantages, maven it is easily and cheaply formed, devil 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 too has limitations, ace it whitethorn be difficult for a proprietorship to obtain working groovy needed for growth, two the proprietor has un exceptional personal arrangement for the businesses debts which can result in loses that exceed the money invested in the company and three the flavor of a proprietorship is control to its founder. As the business grows it whitethorn 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 coloured transferability of ownership, and three limited liabilities. The disadvantages are one that earnings may be subject to duplicate taxation, and two assembleting up a corporation involves preparing a chapter, make-up a set of bylaws, register the many required render 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 crack (IPO). This helps them raise additional uppercase that can be use to expand. Agency problems are what it takes to banish managers from acting in their trump interest, rather than in the silk hat interests of the...If you want to bum near a full essay, ordain it on our website: Orderessay

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