a. Why is corporate finance important to all managers?
Corporate finance is very important for managers because it is a primary factor on how businesses are ran. Managers need to stay informed on how money flows through their business in order to maintain business and build a profit.
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 organizational forms a company might have as it evolves from a start-up to a major corporation are sole proprietorships, partnerships, and corporations.
Most companies start as a proprietorship which is a business owned by one person. According to our book, the advantages are it is easy and inexpensive to start, there are not very many government regulations, and its income tax is not taxed on the corporate level. The disadvantages are it may be difficult to build capital which may make it hard for the business to grow, there are also unlimited personal liabilities to business debts, and the life of the business is limited to the life of the proprietor. The advantage of a partnership is it’s easy and inexpensive to start, and taxes are set on a personal level instead of a corporate level. The disadvantages are unlimited persona liability, limited life of the organization, difficulty of transferring ownership, and its difficult raising a lot of capital. Proprietorship and partnerships advantages and disadvantages are very similar. The corporate form advantages are, it’s easy to transfer ownership interest, unlimited life of the business, and limited liability. The disadvantages are corporate, earnings might be subject to taxes being doubled, and there are a lot of state and federal rules that have to be followed when being at the corporate level.

c. How do corporations go public and continue