Part 1 Mini Case:

a. Why is corporate finance important to all managers? Corporate finance is important to all managers because managers should understand and know the health of the company they are working for. Secondly, managers have an obligation to maximize the value of a company for the shareholders of an organization. The decisions that will be made on a regular basis are all affected by the current financial state of a corporation. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.
The forms a company may have from the start up phase to a major corporation phase are as follows: The first step of a corporation’s existence maybe a standard business license as the company starts operating. This is normally controlled as a sole proprietorship. The advantages for this type of form are that: it is easily created and very inexpensive. This form is also subject to few government regulations and is taxed as personal income. The disadvantages include limitations in funding and growth available, the owner has unlimited liability and the life of the business is directly tied to the life span of the owner. The second form maybe a partnership. This allows more flexibility than a sole proprietorship but still has some limitations. For example, a partnership may have a few different options that include a limited partnership and an LLC. One disadvantage of a partnership is that the owners or a single owner has the potential of being liable for their losses including their personal assets. In an LLC, each partner that is involved has a limited liability in the company that is backed solely to their investment. One disadvantage to an LLC is the cost and tax regulations that this type of partnership is subjected to. The next form that