January 5, 2012
Why is corporate finance important to all managers? Corporate finance is the field of finance dealing with financial decisions that business enterprises make and the tools and analysis use to make these decisions. Corporate finance is important to all managers because it assistant managers learn the necessary skills select the corporate strategies and several(prenominal) projects that add on value to their company. It`s as well tool for managers to know how to envision funding for their company and what is the best strategy they need to relieve to do so.Â
b. Describe the organizational forms a company qualification have as it evolves from a start-up to a major corporation. disceptation the advantages and disadvantages of each form.Â
The three main forms of business organization are
1- repair proprietorships that has 3 advantages
1. It is easily and inexpensively formed;
2. It is subject to some government regulations,;
3. The business pays no corporate income taxes.
The proprietorship also has three important limitations:
1. It is difficult for a proprietorship to gain large sums of capital;
2. The proprietor has un special personal indebtedness for the businesss debts
3. The life of a business unionized as a proprietorship is limited to the life of the individual who created it.
Â Â 2- Partnerships with the advantage ofÂ its low cost and ease of formation
The disadvantages are: Â
1. limitless liability;
2. particular(a) life of the organization;
3. Difficulty of transferring self-command;
4. Difficulty of raising large amounts of capital.Â
In a limited partnership, the limited partners are liable only for the amount of their investment funds in the partnership; however, the limited partners typically have no control
Â Â 3- Corporations. It has three major advantages:
1. Unlimited life,
2. Easy transferability of ownership interest,
3. Limited liability of the equity investors than partnership.
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