The Connection Between Corporate Finance and Economic Development

The Connection Between Corporate Finance and Economic Development

Description/Paper Instructions

“The Connection Between Corporate Finance and Economic Development”

Corporate finance is the branch of finance that deals with the financial management of corporations. Economic development, on the other hand, refers to the process by which a country, region or community improves its economic, social and political well-being. In this essay, we will explore the connection between corporate finance and economic development.

Corporate finance plays a crucial role in the economic development of a country. It is responsible for the efficient allocation of resources, which is essential for the growth and development of a nation. Efficient allocation of resources is achieved through the efficient management of financial resources. Corporate finance helps companies to raise capital, manage risks, and make strategic decisions that lead to growth and development.

One of the key ways that corporate finance contributes to economic development is through capital formation. Capital formation refers to the process of generating and accumulating financial resources that can be used for investment. Corporate finance provides the framework for companies to raise capital through various means, such as equity, debt, and hybrid securities. The availability of capital is essential for companies to invest in new projects, expand their operations, and create employment opportunities.

Another way that corporate finance contributes to economic development is through risk management. Corporations face various risks, such as credit risk, market risk, and operational risk. Effective risk management is essential for the sustainability of corporations and for maintaining the stability of the financial system. Corporate finance provides the tools and techniques for managing risks, such as hedging strategies, insurance, and diversification of investments.

Corporate finance also contributes to economic development through mergers and acquisitions. Mergers and acquisitions involve the consolidation of companies, which can result in increased efficiency and cost savings. Mergers and acquisitions can also lead to the acquisition of new technology, intellectual property, and market share. This can lead to increased productivity, innovation, and competitiveness, which are essential for economic growth and development.

Furthermore, corporate finance plays a role in promoting good corporate governance. Good corporate governance is essential for the efficient functioning of corporations and for maintaining the confidence of investors and stakeholders. Corporate finance provides the framework for ensuring that companies are accountable, transparent, and responsible in their operations. This can lead to improved access to capital, increased investment, and greater economic development.

In conclusion, corporate finance plays a crucial role in economic development. It is responsible for the efficient allocation of resources, capital formation, risk management, mergers and acquisitions, and promoting good corporate governance. These factors are essential for the growth and development of a nation. Therefore, it is important for policymakers and stakeholders to recognize the importance of corporate finance in promoting economic development and to support policies and initiatives that facilitate its growth and development.

The Connection Between Corporate Finance and Economic Development

RUBRIC QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points:  Student failed to submit the final paper. 20 points out of 50:  The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50:  The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately.  Elements of the required response may also be lacking. 40 points out of 50:  The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples.  The answer is complete. 50 points:  The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples.  No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points:  Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points:  Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points:  References to scholarly sources are occasionally given; many statements seem unsubstantiated.  Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points:  Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented.  APA 6th Edition is used with only a few minor errors.  There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points:  Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented.  APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points:  Student failed to submit the final paper. 5 points out of 20:  The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors  10 points out 20:  The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20:  The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points:  The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points:  Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements.  The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
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