Mini-case# 1

Why is corporate finance important to all managers

Corporate finance helps provide the managers with the skills and knowledge required to identify and analyze the corporate strategies and options possible . The managers can analyze and study how a strategy or a project pr process can help increase value of the firm . They can also run cost benefit analysis , net present value etc of future ventures to understand their suitability in the business . The funding requirement and capital structure of firms can be reviewed and understood , and future funding strategies can also be

formulated with the help of knowledge of corporate finance . So the overall functionality and profitability of the company can be better understood with such skills and knowledge

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

An organization may undergo various stages in the business life cycle as it grows and expands . A business could start as a start up proprietorship . This form has three advantages , these are : the organization can be formed with ease and in an inexpensive manner . The government regulations subjected to this form are also lower , also they are not subjected to corporate taxes , but only personal taxes applied to the owner . The disadvantages of this form also exist though , and those are : the capital required for growth and expansion may be difficult to obtain , the liability for the proprietor is unlimited , and once the...