1. Corporate Finance Overview
Now the ultimate goal of corporate finance, or its purpose, is always to
maximize the value of the business, and this is done through planning and
implementing management resources and always balancing risk and profitability.
Now we mentioned that this course would be divided into three sections.
For the first section, when we talk about capital investment, we will look
at deciding what projects or businesses to invest in. We're always looking
to earn the highest possible risk adjusted return.
In the second section of the course, we'll look at capital financing,
and this is where we'll determine exactly how to fund the capital investments
that we've selected. We're always looking to optimize the firm's capital
structure, and this is done by minimizing the weighted average cost of capital
or WACC. And finally, in the third section of the course,
we'll look at capital return. Capital return is what a company would do
when there are no adequate businesses or projects to invest in.
We'll decide how and when we want to return capital to investors.
2. Let's practice!