Professional Documents
Culture Documents
Corporate finance is a concentration of financial management concerned with all of the financial
activities related to running a corporation. Corporate finance is primarily concerned with
maximizing shareholder value through long-term and short-term financial planning. Everything
from capital investment decisions to investment banking falls under the domain of corporate
finance.
Next Up
1. Corporation
2. Corporate Charter
3. Corporate Governance
4. Equity Financing
5.
Further, corporate finance aids a company's leadership team with the evaluation and analysis of a
company's financial statements. Based on the analysis, corporate finance professionals make a
recommendation that furthers the company's initiatives.
For example, a public corporation is assessing expansion options through the construction of a
new manufacturing plant. The options are to finance it internally with cash or externally with
corporate debt. After preparing the company's financial statements, the chief financial officer
(CFO) looks at the balance sheet and notices that it does not have adequate cash on hand to both
fund the plant and cover its working capital requirements. Instead, the CFO runs an analysis and
finds that the best course of action is to issue a corporate bond of $1 million at a 5% interest rate
and cover the monthly interest payments until sufficient cash is generated by the plant to pay
down the principal. This decision-making process is corporate finance in action.
Read more: Corporate Finance Definition | Investopedia
http://www.investopedia.com/terms/c/corporatefinance.asp#ixzz4EgcPJ7K6
Follow us: Investopedia on Facebook