•Chapter 1INTRODUCTION TO CORPORATE FINANCEOBJECTIVEToday, corporate financial managers must make decisions in a much more coordinated manner and generally have direct responsibilities in a control process. Because there are financial implications in virtually every segment of the business, he must have sufficient knowledge of finance to integrate these implications into this area. By the end of this chapter, you should be able to: • Understand the nature of business finance. • Understand the financial management framework. • Identify the basic objectives of corporate finance. • The objectives and functions of corporate finance. Finance is the science of managing money and other assets. Therefore, if you think that finance is all about money and how to make a profit, especially when you are running your own business. Then, you are partly right because finance is much more than that. Understanding financial theories and practices is an essential element in making an effective and efficient decision to achieve the goals and objectives of the organization. Even if you don't run any formal organization, finance knowledge is applicable in most of our daily decision-making because the modern economy cannot function without the element of money. THE SCOPE AND NATURE OF CORPORATE FINANCE Corporate finance involves management. of the company's resources to their full potential to provide maximum benefits to owners or shareholders. It deals with: “An attempt to obtain and allocate financial resources effectively and efficiently to achieve the objective of the enterprise; that is, maximizing shareholder wealth by maximizing the stock price. and the liquidity of the company which must be taken into account explicitly.SUMMARY. The role of the CFO has seen dramatic changes over the years. Financial managers must make decisions regarding investment, financing, and management of company assets. The objective of financial decision making is the maximization of owners' wealth. Dividend policy determines the ultimate allocation of a company's profits between retaining and paying cash dividends to its shareholders. STUDY QUESTIONS1. Discuss the decisions the financial manager must make.2. Compare and contrast the objectives of profit maximization and shareholder wealth maximization.