Corporate finance is the area of finance dealing with the sources of funding and the capital structure of corporations and the actions that managers take to increase the value of the firm to the shareholders, as well as the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to maximize shareholder value. 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.

1. Introduction to
Corporate Finance
Session One

2. Corporate Finance
• Text book: Fundamentals of Corporate
Finance by Brealey, Myers, Marcus
• Reference book: Corporate Financial
Management by Douglas R. Emery & John D.
Finnerty

3. Corporate Finance
Activity
Marks
Duration
Frequency
Selection
Weight age
Quiz
10
Max. 15 minutes
Three
Best 2
10%
Assignment
10
Two weeks
Two
Best 1
10%
Hourly Exam
20
75 Minutes
Two
Best 1
20%
Report/Presentation
10
N/A
One
One
10%
Final
50
3 hours
One
One
50%

4. Course Outline
Introduction
Value
Special
Topics
&
Investment
Debt & Pay
out Policy
Risk
Financing

5. What is Corporate Finance ?
Corporate Finance is to oversee the financial
activities of a company. It is primarily concerned
with maximizing shareholder value through longterm and short-term financial planning and the
implementation of various strategies.
Everything from capital investment decisions to
investment banking falls under the domain of
corporate finance.

6. The Role of The Financial Manager
• Capital Budgeting Decision
– Decision to invest in various assets.
• …also called the Investment Decision

7. The Role of The Financial Manager
• Financing Decision
– The form and amount of financing of a firm’s
investments.
• Capital Structure
– The mix of long term debt and equity financing.

8. The Role of The Financial Manager
(2)
(1)
Firm's
Financial
operations
Manager
Real assets
(4a)
(4b)
(3)
(1) Cash raised from investors
(2) Cash invested in firm
(3) Cash generated by operations
(4a) Cash reinvested
(4b) Cash returned to investors
Investors
(stockholders/
debtholders
save and invest
in a firm.

9. Who is The Financial Manager?
Chief Financial Officer
Treasurer
Controller

10. Who is The Financial Manager?
• Chief Financial Officer (CFO)
– Oversees the treasurer and controller and sets
overall financial strategy.
• Treasurer
– Responsible for financing, cash management, and
relationships with banks and other financial
institutions.
• Controller
– Responsible for budgeting, accounting, and taxes.

11. Thank you