Corporate Finance- The Subdivision Of Finance

Corporate Finance Student’s Name Institutional Affiliation Corporate Finance Corporate finance refers to the subdivision of finance, which mainly focuses on the structuring of capital, making decisions that deal with investment and matters dealing with finance. The main aim for corporate finance is maximizing the value of the shareholders by using strategies that involve long term and short term planning and the implementation of many important strategies. The activities that fall under corporate finance usually range from investments made on capital to investments on banking. In corporate finance, the instant market price does not usually reflect the true value. There is a big difference between the intrinsic value and the market value although both of the values are used in valuing a company. The intrinsic value is used to estimate the actual and real value of a company without considering the market value of the company. The market value refers to the current price of a company that can be seen by analyzing the stock price of the company. Putting this in consideration, the market value can be sometimes be higher or lower than the intrinsic value. The market value can sometimes be used to define a market capitalization of a company that is being publically traded and the market value is obtained by multiplying the number of the outstanding shares by the price of the shares Intrinsic value is usually the main metric that is used by potential investors to analyze a company. The idea applied in this analysis is that, it is a good decision to invest in a company co...