Short definition: Corporate finance encompasses the financial activities and decisions undertaken by a corporation to maximize shareholder value.
Explanation: It involves managing a company’s financial resources, including raising capital, investing in assets, and distributing profits to shareholders. Corporate finance professionals analyze financial data, evaluate investment opportunities, and make strategic decisions to optimize the company’s financial performance and create value for its owners.
Example: Key areas of corporate finance include capital budgeting (evaluating and selecting investment projects), capital structure (determining the mix of debt and equity financing), and working capital management (managing short-term assets and liabilities).
Additional information (optional): Corporate finance plays a crucial role in a company’s success. It involves balancing the need for growth and profitability with the need to manage risk and maintain financial stability.