Corporate finance encompasses all the undertakings of a business. It looks into how

businesses finance their transactions and business events, invest their resources and finally,

evaluate the results. Corporate finance is relevant to both large and small businesses. Three

fundamental principles that underline corporate finance include investment, financing and the

relevant dividend principles (Castle, 2008). Incorporating corporate finance principle into

business model, the companies aim to achieve their objectives and value maximization.

Corporate finance deals with the businesses investing in assets and projects. Choosing

investment assets and projects, the company aims at yielding investment returns over and above

the minimum hurdle rates. The investment decisions are based on the hurdle rates, the evaluation

of advantages and disadvantages of the projects and finally, the cash flows, which are generated

in the result of project implementation. The cash flows are also necessary for calculating the net