Introduction to Finance
Finance can be defined as the science & art of managing money. It includes activities like investing, lending, saving, borrowing, budgeting & forecasting. To finance is to provide money for the business. There are 3 types of finance: Personal Finance Corporate Finance Public/Government Finance But financing decisions are taken in 2 contexts: 1.Personal Context 2.Business/Corporate Context In Personal context , it is related to decisions about: What proportion of earnings to be spent What proportion of earnings to be saved How much of savings to be invested In Business context , it is related to decisions about: How much funds to be raised From which source should the funds be raised Considering the cost of capital (i.e. expected rate of return) In which project should the firm invest Wealth maximization (i.e. higher ROE) ...