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1
Introduction to
Corporate Finance
Corporate Finance
Investment
Cash Cash
What is Corporate Finance?
Financing
Value Creation
Investment
Liquidity
What is Corporate Finance?
Corporate Finance
Value Creation
What is Corporate Finance?
Equity
Assets
Liabilities
What is Corporate Finance?
The
Financial
Manager
What is Corporate Finance?
Responsibilities of a Financial Manager
Buy assets that earn Choose long-term
more cash than they Investments that
cost increase firm value
Maximise
Value from
Cash
Raise cheap external Ensure efficient tax
financing policy
What is Corporate Finance?
Cash is the centre of all financial decisions
What is Corporate Finance?
Cash Flow Considerations
Identification
Timing
Risk
Maximise Avoid
Profits Distress
Be the
Survive
Best
Maximise Earnings
Sales Growth
The Goal of Financial Management
One overriding aim
Maximise
Firm Value
The Financial Markets
Where do companies get
financing?
The Financial Markets
Different sources of financing
Private Bank
Equity
Investors Loans
Short-term
Bonds
Financing
The Financial Markets
Two common market structures
Intermediary Intermediary
is the Dealer is the Agent
Intermediary
Intermediary
earns
earns spread
commission
Corporate Finance in
Action
Google Case Study
Corporate Finance in Action
Google’s Early Days…