Corporation finance

Corporation finance or, broadly speaking, business finance can be defined as the activity concerned with the raising and administering of funds used in business. Since today business property is held mostly by the impersonal units known as corporations, the emphasis in the study of business finance is given to corporation finance and the matters of policy that are entailed in the financial management of these larger organisations. Besides, the greater complexity and the larger public interest in the affairs of the corporation justify special attention to its financial problems.

Corporation finance deals with precedents, practices and policies based on expediency or experience, accident or anticipation. It discusses both fact and policy. It is concerned with fact, in so far as it describes the prevailing precedents and practices involved in financial administration and management; it deals with policy in so far as it succeeds in formulating principles or rules of expe diency which may serve as guides to sound financial procedure.

"Corporation finance deals with the financial problems of cor porate enterprises. These problems include the financial aspects of the promotion of new enterprises, and their administration during early development, the accounting problems connected with the distinction between capital and income, the administra tive questions created by growth and expansion, and, finally, the financial adjustments required for the bolstering up or rehabilitation of a corporation which has come into financial difficulties" 2

It will thus be noted that corporation finance studies the financial operations carried on by a corporation from the time of its very inception to its growth and expansion. It analyses the financial implications involved in the promotion of corporate enterprises. It assists in scanning the financial plans of new and established business units. It examines the nature, extent and form of the capital required by corporations. It scrutinizes the practices and policies of administering corporate income.