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:

  1. Capital investment
    • Decide where to invest – project/business
    • Goal is to earn highest possible return
  2. Capital financing
    • Identify how to fund for those investments
    • Objective is to optimize capital structure
    • Goal is to have lower cost of capital
  3. Dividends and return of capital
    • How and when to return capital to investors