Investment Banking Corporate Finance 

The various financial dealings that a company undertakes is collectively grouped under the term corporate finance. It also refers to the tools, methods and procedures used by the company in taking these financial decisions. Most companies have a separate division to deal with the area of corporate finance. The aim of such a division is to minimize risk while maximizing corporate value. It attempts to put to optimum use the resources that are available to the company. Corporate finance involves both long term and short-term decisions. The long-term decisions are also called capital investment decisions and include such decisions as to whether investment must be financed with equity or debt and whether the dividends must be paid to the shareholders. Short-term decisions are related to the working capital and include short-term borrowing, cash, short-term assets and current liabilities.

Corporate finance is associated with investment banking. Investment banking refers to the transactions by which a company raises funds. Investment banks assist companies in raising capital by underwriting and playing the role of an agent in the issue of securities. Investment banking helps raise funds in two ways. They can sell stock and thus draw on public funds through the capital market. The other way is to claim a stake in the company in exchange for venture capital. Investment bankers also offer advice on various financial aspects. They assist in mergers and acquisitions. They offer advice on when the market is most suitable for public offerings and on the best way of managing public assets. These banks also engage in some private brokering, that is they deal with the buying and selling of companies they represent.

Investment banks are also involved in global transaction banking, which provides lending, cash management and securities brokerage to institutions. Merchant banking is another business that investment banks engage in. Investment bankers also manage the securities and assets of private investors as well as of institutions such as insurance companies and corporations. This is known as investment management. The division, which deals with investment management, is usually divided into private wealth management and private client services.

Earlier, commercial banks were not allowed to engage in commercial banking. Recently, in 1999, it was made legal for a bank to practice both commercial and investment banking. Investment banking is being made available to small companies and clients with the emergence of banks that operate on many levels. A career in investment banking is very much sought after and rewarding.