Exam (elaborations)
FUNDAMENTALS OF CORPORATE FINANCE EXAM FULLY COVERED -10
- Course
- Institution
FUNDAMENTALS OF CORPORATE FINANCE EXAM FULLY COVERED -10
[Show more]
Content preview
FUNDAMENTALS OF CORPORATE FINANCE EXAM FULLY COVERED #101. Corporate finance: 3. What long-term investments should you take on
2. Where will you get the long-term financing to pay for your investment?
3. How will you manage your everyday financial activities, such as collecting from customers
and paying suppliers?
2. Financial Management Decisions: capital budgeting, capital structure, working capital
management
3. Capital budgeting: What long-term investments orprojects should the business take on?
4. Capital structure: How should we pay for our assets?
• Should we use debt or equity
5. Working capital management: How do we manage the day-to-dayfinances of the firm?
6. Three different legal forms of business organization exist: 1. Sole proprietor- ship
2. Partnership
3. Corporation
7. Sole Proprietorship: A business owned by one person
Someone who is just starting out and deciding if entrepreneurship is the right course
Someone who isn't too concerned about liability and separating themselves from the business
8. Sole Proprietorship Advantages: Simplest type of business to start
Least regulated form of organization Owner
keeps all the profits
9. Sole Proprietorship Disadvantages: Owner has unlimited liability for business debts
All business income is taxed as personal income
Life of sole proprietorship is limited to owner's life span
1/
14
, FUNDAMENTALS OF CORPORATE FINANCE EXAM FULLY COVERED #10
Amount of equity that can be raised is limited to the amount of the proprietor's personal wealth
Ownership may be difficult to transfer
10.A partnership: a business organization owned by two or more persons who agree on a
specific division of responsibilities and profits
11.Who Should Form a Partnership?: A general partnership is the ideal business ownership type
for:
2 people going into business together who want to keept hings simple
Business partners who aren't concerned about liability or keeping themselves sep- arate from th
business
12.Advantages of a partnership: same as sole Proprietorship
13.Disadvantages of a partnership: Unlimited liability for business debts on the part of the
owners
Limited life of the business Difficulty of
transferring ownership
14.Downsides of Sole propoertorship: Business owner and partnerships are not separate entities
if someone sues they are suing the owner or owners personally, and their personal assets are at
risk
15.LLC (Limited Liability Company): A limited liability company or LLC puts some separation
between you and your business by removing personal liability
16.Advanatges of a LLC: if you're sued or can't pay business debts, your personal assets may
be protected
offers complete or limited personal liability protection
An LLC has significantly less paperwork and formalities than a corporation.
17. Who Should Form an LLC?: Someone who likes the security of separating their personal and
business assets
Someone who prefers minimal formalities and paperwork
2/
14
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller stanleymwaniki. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78637 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now