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Financial Statement Analysis
The 3 Pillars of Corporate Finance
An overview of the three fundamental decisions that define corporate finance: the Investment, Financing, and Dividend decisions. ✨
Article Points:
1
The Investment Decision: What should we invest in? (Use NPV and IRR).
2
The Financing Decision: How should we pay for it? (Debt vs. Equity).
3
The Dividend Decision: What do we do with the profits? (Reinvest vs. Payout).
4
These three decisions are interconnected and aim to maximize shareholder value.
5
The Investment Decision is about choosing projects where the return exceeds the cost of capital.
6
The Financing Decision is about finding the optimal capital structure that minimizes the WACC.
7
The Dividend Decision is about balancing shareholder returns today with growth opportunities tomorrow.
Source:
The 3 Pillars of Corporate Finance
The 3 Pillars of Corporate Finance
No Mindmap Data
Source:
The 3 Pillars of Corporate Finance
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