MANAGEMENT

Detailed explanation-1: -Firms can raise the financial capital they need to pay for such projects in four main ways: (1) from early-stage investors; (2) by reinvesting profits; (3) by borrowing through banks or bonds; and (4) by selling stock. When business owners choose financial capital sources, they also choose how to pay for them.

Detailed explanation-2: -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.

Detailed explanation-3: -The capital structure of a company is made up of debt and equity securities that comprise a firm’s financing of its assets. It is the permanent financing of a firm represented by long-term debt, preferred stock and net worth. So it relates to the arrangement of capital and excludes short-term borrowings.

Detailed explanation-4: -Financial capital is raised through capital markets in two ways-by selling bonds, which are like loans that the business will repay at a later date with interest, or by selling stocks, which are sold in exchange for the partial ownership of the business.