BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Capital structure budgeting
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Capital structure
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Capital budgeting
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Short-term budgeting
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Detailed explanation-1: -Corporate finance has three main areas of concern: capital budgeting, capital structure, and working capital.
Detailed explanation-2: -Capital budgeting is used by companies to evaluate major projects and investments, such as new plants or equipment. The process involves analyzing a project’s cash inflows and outflows to determine whether the expected return meets a set benchmark.
Detailed explanation-3: -If the objective function in corporate finance is to maximize firm value, it follows that firm value must be linked to the three corporate finance decisions outlined-investment, financing, and dividend decisions.
Detailed explanation-4: -In short, corporate finance focuses on how to maximise the value of the company through its financing and investment decisions, i.e. how to best raise money and use it. Corporate finance departments are charged with governing and overseeing their firms’ financial activities and capital investment decisions.