FROM CORPORATE FINANCE TO COMMERCIAL FINANCE: COMPARING THEORY WITH PRACTICE

Abstract

In this paper we intend to underline the importance of corporate finance rules and principles for conducting a profitable business venture, and we try to corroborate them with specific financial operations which occur during ordinary commerce activity and financial management. The paper focuses on how the profit maximization theoretical paradigm is actually implemented within specific corporate departments, and an important emphasis is put on the risk return relationship, showing how this is a key aspect, responsible for increasing profitability for different corporate investment projects. We show and analyze the case of British American Tobacco.

Keywords

• corporate finance
• return
• risk
• commercial finance
• shareholder
• manager