Reference no: EM133070405

1.What are the major disadvantages of the sole proprietorship and partnership forms of business organisation? What benefits are there to these types of business organisation as opposed to the corporate form? Why are some sole proprietors unwilling to change the form of business organisation to the corporate form?

2.What are the reasons why debt capital in a firm typically has a lower cost of capital than does equity capital in the same firm? Will debt capital in a firm always have a lower cost of capital than equity capital in a different firm? Why or why not?

3.For the purpose of the exposition of financial management techniques, the assumed single objective of commercial entities is often taken to be the maximisation of firm and equity valuation. Comment on the extent to which this assumed single objective is realistic and explain why corporate management need to be concerned with firm valuation.

4.To what extent is it in the interest of the shareholders of publicly quoted companies to link the rewards of managers to the financial performance of the company?