CORPORATE FINANCE
CORPORATE FINANCE
DEFINATION
Corporate finance deals with the financial decision making of the enterprise.
INTRODUCTION:
Corporate Finance deals with the finance available to the enterprise to meet the future concerns. It deals with all the financial aspects of a company. It deals with the payment functions of the company as well as the investment function of a company. It deals with the selling of stocks, bonds and other investment finances of a company. It deals with the generating fund at a lower cost. It deals with the selling of company stock with a better price, retained earnings of the company and investment returns of the company. It also deals with the bank payment, generating finance as a bank loan and other payments of company.
FUNCTIONS OF CORPORATE FINANCE:
These are the functions of corporate finance which are as under,
- Generating the company fund and raising finance.
- Risk management of the company.
- Financial management of the company.
- Capital budgeting of the company.
- Corporate governance.
- Investment decision
- Dividend on shares
- Working capital management
RESOURCES OF FUND:
Corporate Finance promotes a company’s finance as a useful resource and investment procedure. The main source of a company fiancé is Debt and Equity Finance. Finance depends on the need of the company. There are three kinds of funds which are as under,
- Short Term Finance
- Medium Term Finance
- Long Term Finance
SHORT TERM FINANCE:
Short term finance deals with the less than one year loan financing.
Medium Term Finance:
Medium Term Finance deals with the one to five year loan financing.
LONG TERM FINANCE:
Long Term Finance deals with the more than five year loan financing.
DEBT AND EQUITY FINANCE:
Debt and equity finance are different from each other.
DEBT FINANCE:
Debt Finance means the money which borrowed from the financing companies or other lenders.
In other words:
The money you borrow for run your business activities.
There are two kinds of debt financing which are as under,
- Short Term Debt Financing
- Long Term Debt Financing
EQUITY FINANCE:
Equity finance is known as share capital of a company.
In other words:
The capital generated from the business owners or from other resources is called Equity Finance.
Tags: Corporate Finance, Financial Decision Making, Financial Management, Functions of Corporate Finance, Short term and Long Term Financing