Corporate Finance Strategy

See the financing needs early

• Good investment decisions - determine discounted cash flows to net present value; IRR NPV, Payback period - use different techniques and test assumptions
• Good financing decisions – minimize capital costs, maintain financial flexibility – bond ratings, cost of equity, weighted cost of capital

Don’t use of a textbook approach – check risks, competitive advantage

Maximize shareholder value – incentive systems influence value; improperly valued security provides opportunity – Value drivers ROE, reinvestment, LBO

• Improve value by better capital structure, cost restructuring and leverage

Strategies can help, but managers create the value