What is corporate finance?

Corporate finance is a type of finance that tries to analyze and study the business variables that try to maximize the value of a shareholder. Corporate finance takes into account the valuation of assets, as well as those decisions that must be made in order for the company to fulfill its development satisfactorily.

Among the investment decisions it takes into account, we highlight: dividend payment; own / third party financing; level of liquidity; cash flow efficiency; level of indebtedness y leverage; etc.

What activities are of corporate finance?

It is important that we emphasize the activities that identify corporate finance. Not only are this area of ​​the company taken into account, but other aspects such as international expansion plans or competing business acquisitions are also valued for the survival of the company.

Ultimately, the set of activities that corporate finance identifies allows organizations to make strategic decisions, based on an attitude and efficiency (important variables that the company takes into account over time). Some of those activities are:

  • Mergers and acquisitions that can affect the company.
  • Venture capital and private investment capital and value creation models.
  • The legal structure of the company.
  • The financing of the projects in which it may be involved.
  • Capital structure, financial models and investment models.
  • Dividends and discount of dividends of a company.
  • The cost of capital.
  • Level of indebtedness and financial leverage.
  • The development of investment banking.

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