This module deals with the fundamental problems of corporate finance. Here the fundamental methods of investment calculation and planning will be introduced as well as the most important instrument and decision alternatives of corporate financing. The contents of the lecture will be taken up and expanded upon during the tutorial session through application and concrete tasks. In particular, examples and case studies for solving investment and financing decisions will be worked on and fundamental aspects of corporate financing will be dealt with.

Corporate finance is capital structuring and investment decisions made by the finance management of an organisation

Explanation:

“Corporate finance is the division of finance that deals with financing, capital structuring, and investment decisions. Corporate finance is primarily concerned with maximizing shareholder value through long and short-term financial planning and the implementation of various strategies. Corporate finance activities range from capital investment decisions to investment banking’’ (Kenton, 2019).

Capital structure is how capital is formed, it includes loans (liabilities) or equity (selling shares).  

Investment decisions are what the company decides to do with the capital, whether investing in more capital or being a lender or paying more dividends to shareholders.  

An investment is measured by the return it brings and the risks involved with it.

Return on investment = (net profit / cost of investment) * 100

For example,                 = (30 000 / 150 000) * 100

                                       = 20%

Types of investments include :

Buying Shares

Purchasing Property

Keeping Cash

Fixed deposit interest

Buying Bonds