The ultimate goal of corporate finance activities is to maximize the value of a business through planning and management of financial resources while balancing risk and profitability. The three main activities of corporate finance are:
- Capital investment
- Decide where to invest – project/business
- Goal is to earn highest possible return
- Capital financing
- Identify how to fund for those investments
- Objective is to optimize capital structure
- Goal is to have lower cost of capital
- Dividends and return of capital
- How and when to return capital to investors
