Q.Explain the functions (financial decisions) of Corporate Finance.

Every rupee a company handles passes through one of three decisions — how to raise it, where to invest it, and how much of the resulting profit to pay out.

1. The Financing Decision. This decision concerns HOW the company should raise the funds it needs — the mix of share capital, debentures, public deposits, and loans that make up its capital structure. It balances cost (borrowed funds are usually cheaper, since interest is a fixed, tax-deductible charge, while dividend is not) against risk (too much borrowed capital raises the fixed burden of interest and repayment).
2. The Investment Decision. Once funds are raised, this decision concerns WHERE those funds should be deployed — the mix between long-term investment in fixed assets (land, buildings, machinery) and short-term investment in current assets (stock, debtors, cash) needed for day-to-day operations. It directly determines the company's fixed-capital and working-capital requirements.
3. The Dividend Decision. This decision concerns HOW MUCH of the profit earned should be distributed to shareholders as dividend, and how much should be retained in the business as retained earnings to finance future growth. A generous dividend satisfies shareholders in the short run; higher retention supports long-term growth and reduces future dependence on external borrowing.
   ✓Final answer

   Corporate finance performs three core functions: the Financing Decision (how to raise funds — the capital-structure mix), the Investment Decision (where to deploy funds — fixed versus current assets), and the Dividend Decision (how much profit to distribute as dividend versus retain for growth).

Listing unrelated administrative activities instead of the three specific financial decisions the syllabus names — financing, investment, and dividend.