Introducing corporate finance
Introducing corporate finance

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Introducing corporate finance

External stakeholders

This course considers the relationship of a business with one of its key external stakeholder groups – the providers of financial resources, who are also investors in the business.

Two key questions, for you as a manager, are:

  • Which projects should your organisation invest in?
  • How should your organisation find and secure the finance to pay for them?

Additional questions to ask are:

  • How do investors get information to decide where to invest their savings?
  • How can investors control the way their savings are used?
  • How can businesses be accountable to their investors?
  • What is a fair return for the investors to receive in return for the use of their savings?
  • How do investors assess the risk of entrusting their savings to businesses and how are they rewarded for running that risk?
  • How do the financial markets match investors with users (i.e. businesses)?
  • How efficient are the financial markets at pricing?

Activity 3: Identifying key themes

Allow 5 minutes

Can you identify some key themes from our questions, above?

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Feedback

Key themes are:

  • control
  • information
  • accountability
  • return
  • risk
  • markets.
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