Week 1 Homework 1

Week 1 Homework 1 FI515 Managerial finance a. Corporate finance is important to managers because successful companies have becoming funding to run for their plans and support their operations. closely companies need coin to purchase land, buildings, equipment, and materials. Companies heap reinvest a portion of their earnings, but to the highest degree 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, unmatchable it is advantageously and cheaply formed, deuce it is type to few regulations, and three its income is non subject to corporate taxation but is taxed as fuelcel of the proprietors personal income. The proprietorship also has limitations, adept it may be difficult for a proprietorship to nonplus working capital needed for growth, two the proprietor has un majestic pers onal obligation for the businesses debts which can result in loses that excel the money invested in the company and three the life of a proprietorship is limited to its founder. As the business grows it may enlarge 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 inexhaustible 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 cha pter, writing a set of bylaws, filing the ma! ny required state and federal official reports, which is more(prenominal) complex and time-consuming than creating a proprietorship or partnership. c. Companies tick off 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 playacting in their best interest, rather than in the best interests of the...If you demand to bum about a full essay, order it on our website: OrderCustomPaper.com

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