Assume that you recently graduated and have just reported on working 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.

1. Why is corporate finance      important to all managers?
2. 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.
3. How do corporations go public      and continue to grow? What are agency problems? What is corporate      governance?
4. 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?