Evolution of corporate finance methods

Author:Ina Balukja
Position:Faculty of Economics, University 'A. Xhuvani
Pages:306-312
Evolution of corporate finance methods
Msc. Ina BALUKJA
1
Abstract
The paper has more introductory character, aiming in general terms to introduce
the concept of corporate financing by briefly addressing the genes of this process. The
historical part refers to the development that this institute has had in Europe and beyond.
In the focus of this topic are the legal aspects of corporate finance modes, leaving out any
financial analysis of this element. Consequently, the entirety of legal acts g overning
corporate finance will be addressed. For reasons that mainly relate to the integration
processes of our country, European legislatio n has been selected, as a comparative base
reference. Con sequently, the analysis of Albanian legislation in this respect will be made
with reference to European legislation that is abundant and widely dealt with in European
academic circles.
Keywords: corporation, capital, shareholder, creditor, guarantee, shares, corporation,
financial instruments.
JEL Classification: K22, K23
1. Introduction
Societies and their capital needs commercial companies are created to
achieve a common economic objective which is and should be at the same time the
goal of all its administrative staff. The purpose of creating a business organization
is to maximize the profits and wealth of its shareholders.
Shareholders maximize their profits by increasing the profits of the
company that will then be distributed proportionally to the share they own each, as
well as through raising the value of the shares in the market. Society is a legal
entity that, in the exercise of its activity, in addition to the interests of shareholders,
affects the interests of a much wider group of stakeholders. For this reason,
alternative objectives of other groups of interest may challenge the primary
objective of the company's shareholders. Other stakeholders, such as employees,
clients, creditors, and the local community where the company operates, may have
different expectations and different visions for the company that may conflict with
shareholders' expectations. In this context, society is obliged to take into
consideration, in the exercise of its activity, the interests of other actors which in
any case, will serve the primary objective of society. To achieve the goal for which
it is created, it is necessary for the company to have an initial capital.
1
Ina Balukja - Faculty of Economics, University "A. Xhuvani "Elbasan, Albania, inabalukja@
hotmail.com.

To continue reading

Request your trial