Corporate finance is the backbone of every business, guiding its financial decisions and strategies. In this article, we will explore the essential role of corporate finance, its core functions, and why it is crucial for a company’s growth and sustainability.
Understanding Corporate Finance
Corporate finance is the area of finance that deals with the financial decisions made by corporations or businesses. These decisions encompass various aspects of the company’s finances, including investment, financing, and dividend policies. The primary goal of corporate finance is to maximize shareholder value while managing financial risks.
Core Functions of Corporate Finance
Corporate finance encompasses several core functions that are integral to a company’s success:
1. Capital Budgeting
Capital budgeting involves evaluating investment opportunities and deciding which projects or assets a company should invest in. This process considers factors like expected returns, risk, and the company’s overall strategic goals.
2. Capital Structure
Determining the optimal capital … Read more
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