Caso Della Torre

Caso Della Torre

a. Why is corporate finance important to all managers?
Corporate finance deal with financial decisions business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm's financial risks.

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.
|Types of business | | | |
|organization |Description |Advantages |Disadvantages |
| | | | |
|Sole Proprietorship |Form of business organization with a |Easy to establish. |Decisions are not checked by a |
| |single owner who has unlimited |Simple decision making process. |group consensus. |
| |liability for the firm’s debts and |Profits are only taxed once. |The owner’s entire wealth is |
| |other legal obligations. Income flows | |exposed to risk. |
| |through to the proprietor (owner) who | |The business may cease to exist |
| |pays taxes on it as personal income. | |when the owner dies. |
| | | |The raising capital can be |
| | | |difficult and relatively |
|