Typically, "corporate finance" relates to the long term objective of maximizing the value of the entity's assets, its stock, and its return to shareholders, while also balancing risk and profitability. This entailsSee Aswath Damodaran, Corporate Finance: First Principles three primary areas: Capital budgeting: selecting which projects to invest in—here, accurately determining value is crucial, as judgements about asset values can be "make or break". Dividend policy: the use of "excess" funds—these are to be reinvested in the business or returned to shareholders. Capital structure: deciding on the mix of funding to be used—here attempting to find the optimal capital mix re debt-commitments vs cost of capital. The latter creates the link with investment banking and securities trading, as above, in that the capital raised will generically comprise debt, i.e. corporate bonds, and equity, often listed shares. Re risk management within corporates, see below.
Typically, "corporate finance" relates to the long term objective of maximizing the value of the entity's assets, its stock, and its return to shareholders, while also balancing risk and profitability. This entailsSee Aswath Damodaran, Corporate Finance: First Principles three primary areas: Capital budgeting: selecting which projects to invest in—here accurately determining value is crucial, as judgements about asset values can be "make or break". Dividend policy: the use of "excess" funds—these are to be reinvested in the business or returned to shareholders. Capital structure: deciding on the mix of funding to be used—here attempting to find the optimal capital mix re debt-commitments vs cost of capital. The latter creates the link with investment banking and securities trading as above, in that the capital raised will generically comprise debt, i.e. corporate bonds, and equity, often listed shares. Re risk management within corp,o,rates, see below.