Why is corporate finance important to all managers? Explain with proper examples?

Corporate finance is application of finance in companies which will be helping these companies in order to apply their financial in a better manner and it will help in achieving the aims of the organisation by being financially effective and financially efficient. Corporate finance will be helping the company in order to make better decisions and have a better capital structure which will be providing it with competitive age and it will help the organisation to manage with the changing economic adversities and maximizing the rate of return.

Corporate finance will be also helpful in order to raise the capital structure in a better way and maintain the optimal capital structure in the company which will be helpful in reducing the overall cost of capital and maximizing the overall rate of return.

Corporate finance will also help the managers in order to select better projects according to the capital budgeting decisions and maximize the rate of return by selection of appropriate projects which will be helpful for the company to manage with shareholders expectation and provide them with high rate of return.

Corporate finance will also help the company in order to survive and sustain for the longer period of time and maintain a healthy level of solvency and liquidity so that it can secure itself against the changing structure in the environment.

Example of Corporate finance would be including the application of capital structure theory by selection of optimal capital when the debt capital will be undertaken by the company and the benefits which will be accruing to debt capital through interest tax rate shield will be compared with the cost of financial distress in order to arrive at an optimal structure.