Concepts in Corporate Finance

The role of the financial manager, the goal of shareholder wealth maximization, and how finance connects to a firm's broader strategy.

Present & future values, discounting, compounding, annuities, and perpetuities — the foundation for every valuation technique.

Expected return, variance, diversification, systematic vs. unsystematic risk, and the risk-return tradeoff investors demand.

Cost of debt, cost of equity, and the weighted average cost of capital (WACC) used to discount a firm's future cash flows.

Evaluating long-term investment decisions with NPV, IRR, payback period, and sensitivity analysis.

The debt-equity financing mix, trade-off theory, and how leverage affects firm value and risk.

How firms decide between paying dividends and retaining earnings, and the signaling effects of payout decisions.

See how every topic on this page connects — from financing and investment decisions through to firm value.