Corporate finance

 corpfin1

Corporate finance is all about Risk and Return. I’m beginning to realise that every “analytical” course in MBA serves corporate finance. The reason I say this is because the concepts of economics, statistics, accounting, decision modelling etc can be applied in corporate finance but not the other way around. So, corporate finance is pretty much on top of the “MBA knowledge” pyramid.

If you think about it, the primary objective of corporate finance is ‘maximizing share price”. Yes, it is the share price and not stake holder value, revenue or other stuff. Corporates maximize share price to increase the wealth of share holders (i.e. general public). Let’s assume that the wealth of most share holders around the world is yet to reach a level, beyond which the positive impact of wealth on happiness diminishes and let’s also assume that over time, a majority of the population will indeed own shares of different corporations. Based on these assumptions, MBA directly helps students improve happiness of the world,’ and yet, look what our dear investment bankers did : )

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