Introduction to Corporate Finance

This ebook will teach you the fundamentals of how corporates make their investing and financing decisions. You will learn about the process of capital budgeting, i.e., the process by which the corporates make decisions about whether to invest in a long-term project or not. This involves understanding and calculating the cost of capital which is discussed in detail. You will also learn about the measures of leverage and their impact on a company’s earnings and financial ratios. You will learn about both operating leverage and financial leverage. Next the book discusses the various ways in which a corporation distributes its earnings to shareholders such as dividends and share repurchases. Finally, the book covers the short-term sources of liquidity for a corporation and how they manage their working capital requirements.

The objective of this ebook is to teach you how to speak the language of corporate finance. More specifically you will learn about,

Capital Budgeting
Cost of Capital
Measure of Leverage
Dividends and Share Repurchases
Working Capital Management