.Corporate Finance Fundamentals

Assignment 85 Pages

Anna University

Corporate Finance

Contributed by

Kirthika Jayakumar

Corporate Finance InstituteⓇ
Corporate Finance Fundamentals
Page 1
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Corporate Finance InstituteⓇ
Learning objectives
By the end of this course, you will be able to:
Corporate Finance InstituteⓇ
Discuss the main capital
investment activities and
valuation techniques
Explain the process of
mergers and acquisitions,
and key considerations for
the deal
Compare debt financing with
equity financing and explain
the optimal capital structure
Outline the capital raising
process
Explore various career paths
in corporate finance
Page 2
Introduction
Corporate Finance InstituteⓇ
Page 3
Corporate Finance InstituteⓇ
The ultimate purpose of corporate finance is to maximize the value of a business through
planning and implementing management resources while balancing risk and profitability.
Capital Investments
• Decide what projects /
businesses to invest in
• Earn the highest possible
risk-adjusted return
Capital Financing
• Determine how to fund
capital investments
• Optimize the firm’s
capital structure
Dividends & Return
of Capital
• Decide how and when
to return capital to
investors
Corporate finance overview
Page 4
Corporate Finance InstituteⓇ
Contacts
Contacts
Investment
Banks
“Sell side”
Bonds or shares
Capital
Corporations
Institutions
$
“Buy side”
Fund
Manager
$
$
Investors
Players in corporate finance – primary market
Public
accounting
firms
Page 5
Corporate Finance InstituteⓇ
Investment bank Investment bank
Sales, trading
and research
Sales, trading
and research
Stock
exchange
/
OTC
Wants to sell
Fund Manager
Wants to buy
Fund Manager
Players in corporate finance – secondary market
Page 6
Corporate Finance InstituteⓇ
Retail Institutional Public Private
• High net worth
individuals
• Mutual funds
• Pension funds
• Private equity firms
• Venture capital firms
• Seed / angel investors
• Traded on stock
exchanges
• Owned and
traded by a few
private investors
Corporations
$
Investors
Types of participants
Page 7
Corporate Finance InstituteⓇ
Initial public
offering (IPO)
Follow-on
offering
Private
placement
Mergers &
acquisitions
(M&A)
Leverage
buyout (LBO)
Divestiture
Types of transactions
Page 8
Capital Investments
Corporate Finance InstituteⓇ
Page 9
Corporate Finance InstituteⓇ
Any investment for which the economic benefit is greater than one year.
Opening a new
factory
Entering a new
market
Acquiring another
business
Research and
development of new
products
What is a capital investment?
Page 10

.Corporate Finance Fundamentals

.Corporate Finance Fundamentals

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