improvement of the company. Jeff Chapman Eisnaugle says that corporate finance and all of the techniques involved within it are necessary for a business if they ever want to become well-established. Corporate finance primarily focuses on three different areas. The first was capital budgeting, which was previously explained. The second is about the sources of capital, which involves how each investment made in the company will be funded. Investment capital is a way to provide currency through sources such as shareholders, equities, or creditors. Essentially it is about receiving initial investment money in order to get the business to the level of self-sustained growth, the goal of any real business. This kind of short-term capital is usually obtained by lenders or investors and can involve an interest return rate or a share of the company’s overall earnings. The third area of study is the dividend policy, which requires the owners and managers to figure out if they have any excess capital at the end of the year that can be utilized for future investments within the company. So instead of using stock holders and creditors, the business can invest in itself so that it can continue to grow and sustain that growth for an extended period of time. This is the value of corporate finance. It is a vital part of any business operation that will allow you to manage your financial situation and plan an adequate strategy in order to continue to grow as a business to a viable future.
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