Corporate finance is the area of finance that deals with the sources of funding, and the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to maximize or increase shareholder value.
Correspondingly, corporate finance comprises two main sub-disciplines. Capital budgeting is concerned with the setting of criteria about which value-adding projects should receive investment funding, and whether to finance that investment with equity or debt capital. Working capital management is the management of the company's monetary funds that deal with the short-term operating balance of current assets and current liabilities; the focus here is on managing cash, inventories, and short-term borrowing and lending (such as the terms on credit extended to customers).
The terms corporate finance and corporate financier are also associated with investment banking. The typical role of an investment bank is to evaluate the company's financial needs and raise the appropriate type of capital that best fits those needs. Thus, the terms "corporate finance" and "corporate financier" may be associated with transactions in which capital is raised in order to create, develop, grow or acquire businesses.
Although it is in principle different from managerial finance which studies the financial management of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms.
Financial management overlaps with the financial function of the accounting profession. However, financial accounting is the reporting of historical financial information, while financial management is concerned with the deployment of capital resources to increase a firm's value to the shareholders.
History of bankingFinancial centre#History and Mergers and acquisitions#History
Corporate finance for the pre-industrial world began to emerge in the Italian city-states and the low countries of Europe from the 15th century.
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Founded in 1904, the Association of Chartered Certified Accountants (ACCA) is the global professional accounting body offering the Chartered Certified Accountant qualification (ACCA). It has 240,952 members and 541,930 future members worldwide. ACCA's headquarters are in London with principal administrative office in Glasgow. ACCA works through a network of over 110 offices and centres in 51 countries - with 346 Approved Learning Partners (ALP) and more than 7,600 Approved Employers worldwide, who provide employee development.
Adjusted present value (APV) is a valuation method introduced in 1974 by Stewart Myers. The idea is to value the project as if it were all equity financed ("unleveraged"), and to then add the present value of the tax shield of debt – and other side effects. Technically, an APV valuation model looks similar to a standard DCF model. However, instead of WACC, cash flows would be discounted at the unlevered cost of equity, and tax shields at either the cost of debt (Myers) or following later academics also with the unlevered cost of equity.
In financial accounting, free cash flow (FCF) or free cash flow to firm (FCFF) is the amount by which a business's operating cash flow exceeds its working capital needs and expenditures on fixed assets (known as capital expenditures). It is that portion of cash flow that can be extracted from a company and distributed to creditors and securities holders without causing issues in its operations. As such, it is an indicator of a company's financial flexibility and is of interest to holders of the company's equity, debt, preferred stock and convertible securities, as well as potential lenders and investors.
This class is designed to give you an understanding of the basics of empirical asset pricing. This means that we will learn how to test asset pricing models and apply them mostly to stock markets. We
Learn through practice (using a Value Chain Management simulation) the key drivers of effective Value Chain Management. From Purchasing to Sales, through Operations and Supply Chain Management, unders
The course covers advanced topics in corporate finance such as the design and valuation of corporate securities, the issuing process for theses securities, real options, and their implications for val
Introduces the DCF method for valuing firms and projects, emphasizing the importance of using cash flows over earnings in finance.
Delves into the world of green bonds, exploring their history, rapid rise, certification process, and challenges in evaluating their environmental and financial performance.
Explores financial analysis methods, emphasizing the importance of ratio comparisons and trend evaluations in assessing company performance.
In this thesis I study how firms choose their optimal debt maturity. The recent financial crisis illustrated why debt maturity is an important determinant of firmsâ capital structure and it also ren
This thesis consists of two chapters that study separate subjects in the area of corporate finance.The first chapter, titled âEconomic Gains in Bank Mergers and Acquisitions â Evidence from Target
This thesis consists of three parts that study separate subjects in corporate finance and corporate governance. The overarching theme is ownership by CEOs and other insiders.In the first part, whic