Corporate Finance are more focused or directed toward the manner in which the directors of a company can create value with financial decisions made by the use of the financial tools. Corporate finance also have principles or key concepts that are the main support of how this discipline, these concepts are the Principle of self-interested Behavior, The Principle of two-sided Transactions, the signaling Principle, the behavioral Principle, the Principle of valuable ideas, The Principle of Comparative Advantage, the options Principle, The Principle of incremental Benefits, The Principles of risk-return trade-off, The Principle of Diversification, The Principles of capital market efficiency and the time-value-of-money Principle (Douglas R. Emery, John D. Finnerty, and John D. Stowe. 2007).
Investors are always waiting for more profit, which means that the investor should take more risks as well you can earn more profits. But otherwise, investors are risk adverse, meaning, they often want to more but they like to take small risks (Douglas R. Emery, John D. Finnerty, and John D. Stowe. 2007).
Guillermo’s store was opened in early 1990 when the economy was very good in the city of sonoro, by the time, guillermo had a everything on his favor for a great and healthy economy since he didn’t have any completion and had all the needed raw material available at low cost as well as the labor; but in late 1990 many changes were seen in the economy of this town with the arrival of new multinational companies which worked with a better technology driven by high tech robots, thus giving more quality and detail the product, for which the business of Guillermo was threatened, affecting his production and
