Why is corporate finance important to all managers?
FINANCE 650- Assignment Mini Case 1
Subject: Business / Finance
Question
Assignment Mini Case 1
Assume that you recently graduated and have just reported to work as an investment
advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle
DellaTorre, a professional tennis player who has just come to the United States from
Chile. DellaTorre is a highly ranked tennis player who would like to start a company to
produce and market apparel she designs. She also expects to invest substantial amounts of
money through Balik and Kiefer. DellaTorre is very bright, and she would like to understand
in general terms what will happen to her money. Your boss has developed the
following set of questions you must answer to explain the U.S. financial system to
DellaTorre.
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a. Why is corporate finance important to all managers?
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.
c. How do corporations go public and continue to grow? What are agency problems?
What is corporate governance?
d. What should be the primary objective of managers?
(1) Do firms have any responsibilities to society at large?
(2) Is stock price maximization good or bad for society?
(3) Should firms behave ethically?
