objective of corporate finance

how corporate finance is used as a decision tool for strategies and operation of a company?

1 Answer(s)


1. The first is the objective function, where we define what exactly the objective in decision making should be.

2. The second is the investment decision, where we look at how a business should allocate of resources across competing uses.

3. The third is the financing decision, where we examine the sources of financing and whether there is an optimal mix of financing.

4. The fourth is the dividend decision, which relates to how much a business should reinvest back into operations and how much should be returned to the owners.

5. Finally, there is valuation, where all of the decisions made by a firm are traced through to a final value