Corporate Finance

You’re the CEO of a public company that hasn’t been performing well. A renegade activist hedge fund manager proceeds to buy 10% of the available shares on the market. Now he’s demanding a board seat...and changes to the company.

First and foremost, he wants you to do something called “enhance shareholder value.” Which is a fancy way of saying: “Hey, Bozo. Make the stock go higher so we make money.”

But, uh...how do you enhance shareholder value? The answer is found in the much broader context of the discipline of corporate finance.

Corporate finance centers on the implementation of strategies aimed at maximizing the profitability and performance of a company in both the short-and-long-term.

So...what corporate finance antics might you engage in to get this activist off your back? Perhaps restructure your organization, bolster stock buybacks, sell off a division, or increase your dividend,

But that’s not all there is to corporate finance. It goes beyond just enhancing shareholder value. It also incorporates decision-making with regard to allocation of capital, how to obtain additional funding, capital budgeting, and working capital management.