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Explanation & Answer
Attached.
Running head: CORPORATE GOVERNANCE
Corporate Governance
Student’s Name
Institutional Affiliation
1
CORPORATE GOVERNANCE
2
Corporate Governance
a. Why is corporate finance important to all managers?
Corporate finance is the division concerned with the financing and investment functions of
the company operations. It is essential to all managers because it influences the capital
structure, determines the amount of debt and equity financing as well as the investment
decisions.
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
i.
Sole proprietorship
Advantage
•
There are only a few regulations which make it easy to form.
Disadvantage
•
ii.
It has a limited life and unlimited liability.
Partnership
Advantage
•
Ease of formation without corporate taxes
•
Has an option of limiting liability
Disadvantage
iii.
•
Limited life with unlimited liability
•
Challenges in raising capital
Limited Company
CORPORATE GOVERNANCE
Advantage
•
Limited liability with unlimited life. Easier to raise funding.
Disadvantage
•
Corporate taxes come into play. Harder to set up due to regulations.
c. How do corporations go public and continue to grow? What are agency problems? What
is corporate governance?
A corporation goes public by ...