Case Solutions
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
12th edition
06/15/2018
Prepared by
Brad Jordan
University of Kentucky
Joe Smolira
Belmont University
CHAPTER 1
THE McGEE CAKE COMPANY
1. The advantages to an LLC are: (a) Reduction of personal liability. A sole proprietor has unlimited
liability, which can include the potential loss of all personal assets. (b) Taxes. Forming an LLC may
a
The biggest disadvantage is the potential cost, although the cost of forming an LLC can be relatively
3. As a small company, changing to a LLC is probably the most advantageous decision at the current