Corporate Finance → Definition → Corporation → Sole Proprietorship to a Corporation Suppose you decide to start a business from your personal savings of $1 million to produce some goods. You hired some work force for this purpose and start the business. In other words, you have created a sole proprietorship. You soon realize that the business […]

Risk in investments means future returns are unpredictable. There is risk in all investments, and even all transactions. In general, the greater the risk involved, the greater the expected return, and similarly, the smaller the risk involved the smaller is the expected return. Consider the following three types of investments: 1. Treasury Bills These are […]

Corporate Finance → Corporation → Financing Decision → Bond → More on Bonds In financing decision we learned that bonds are issued to raise cash. Governments and corporations borrow money by issuing bonds. The bond issuer pays the bond holder regular interest payments and repay the original amount at the expiry date of the bond. For […]

Corporate Finance → Corporation → Financing Decision → Bond A bond is an asset that pays the regular interest payments and repay the original investment at the expiry date of the bond. Regular interest payments are called coupon. The original investment is called the face value and the date of expiry is called maturity or […]

Corporate Finance → Business Structures Business can take many forms. But, the three basic forms are: The Sole Proprietorship The Partnership, and The Corporation The Sole Proprietorship A sole proprietorship is a business owned by one person. The person, owner, is liable for all business debts and obligations. And, the profits of the business are taxed […]