Covers any decisions made by firms which have financial implications, thus, there is a corporate financial aspect to almost every action taken by a firm, no matter which functional are claims reponsibility for it. there are three basic questions that corporate finance attempts to answer:
1.How should the firm’s scare resources be allocated? (Investment Decision)
2.How should these investments be financed? in particular, should the owners use their own funds (equity) or should they borrow money (debt)? (Financing Decision)
3.How much, if any, or the cash flows generated by these investments should be returned to the owners and how much should be reinvested? (Dividend Decisions)