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1. Introduction of
Corporate Finance

2. Objective
At the end of the session, you will be able to understand /
comprehend the following:
• Corporate Finance - Introduction
• What is Corporate Finance
• What is the goal of Corporate Finance
• Ways to raise capital
• Types of Corporate Structure
• Characteristics of various structure
• Areas of Finance
• Corporate Finance Needs
• Different types of funding requirement
Corporate Finance
Introduction

3. Corporate Finance - What?
What is Corporate Finance?
• Corporate finance is the area of finance dealing with the
sources of funding and the capital structure
of corporations and the actions that managers take to
increase the value of the firm to the shareholders, as well as
the tools and analysis used to allocate financial resources
Corporate Finance
Introduction

4. Corporate Goals:
Goals of Businesses are:
• Maximise Profit
• Minimise Cost
• Maximise Market share
What happens if the business is not profitable?
Corporate Finance
Introduction

5. Corporate Finance Goal?
What is goal of Corporate Finance?
• Money is always a scarce resource
• The primary goal of corporate finance is to figure out
how to maximize a company's value by making good
decisions about investment, financing and dividends
• It means how should businesses allocate scarce
resources to minimize expenses and maximize
revenues
Corporate Finance
Introduction

6. Corporate Finance:
Ways to raise resources are:
• Equity / Stock
• Bonds
• Owner capital or
• Bank loans
• Finally, what should a company do with its profits?
• How much should it reinvest into the company, and
• How much should it pay out to the business's owners?
Corporate Finance
Introduction

7. Types of Business Structure:
Common Structure of Businesses:
• Individual / Proprietorship Firm
• Partnership
• Trusts
• Private Limited Company
• Public Limited Companies
Corporate Finance
Introduction

8. Proprietorship Firm Characteristics
Nature of the Business:
• A business owned and operated by one person
• Legally inseparable from the person who owns and
operates the business
• Report income (gross and net) on personal income
tax return
• Net business income is taxed at the person’s
marginal tax rate
Corporate Finance
Introduction

9. Proprietorship Firm Characteristics
Financing:
• Limited to the resources of the individual owning and
operating the Business and their personal capacity to borrow
Formality
• Business records must be maintained for reporting
• Owners may wish to register the business with the
Companies of Registrar
Corporate Finance
Introduction

10. Advantages
• Easy to start
• Little formality – but must
maintain business records
Disadvantages
• Unlimited legal liability
• Net income taxed at
personal marginal tax rate
• Like any other business
• Financing is limited to the
resources of the single
owner
Corporate Finance
Introduction
Proprietorship Firm Characteristics

11. Partnership Firm Characteristics
Nature of the Business
• Involves two or more partners
• Must have at least one general partner who holds unlimited legal liability
for the activities of the business
Financing
• A function of the combined resources of the partners
• Can attract additional resources through limited partner contributions
Corporate Finance
Introduction

12. • Learn More at BSEVarsity.com an online Learning
Marketplace form BSE Institute Ltd.
• BSE also Offers International Courses , Long
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Corporate Finance
Introduction
Thank you