Week 1 Homework 1

Week 1 Homework 1 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(prenominal) companies need property to purchase land, buildings, equipment, and materials. Companies heap reinvest a portion of their earnings, but some 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, iodine it is easily and cheaply formed, 2 it is type to few regulations, and three its income is non subject to corporate taxation but is taxed as get of the proprietors personal income. The proprietorship also has limitations, oneness it may be difficult for a proprietorship to hold in working capital needed for growth, two the proprietor has un colossal personal obligation for the businesses debts which heap result in loses that go along the money invested in the company and three the life of a proprietorship is limited to its founder. As the business grows it may pay off 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 measureless 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 ! national reports, which is more(prenominal) complex and time-consuming than creating a proprietorship or partnership. c. Companies suck to grow and go in the public eye(predicate) by having an sign 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 performing in their best interest, rather than in the best interests of the...If you hope to bum about a full essay, order it on our website: OrderCustomPaper.com

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