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Corporate Capital FinancingLiterature ReviewExecutive SummaryThe capital flow is vital to any business. Without being able to raise capital it is not possible to even start a trade. The share market and the public investment form the cheief source of capital for corporate entities. The Kenesian model has to be considered in the new light of the appearance of modern financial instruments like mutual funds. Many models like the predictive model and consideration of equity are important. We also have to examine the thinking process of capital creation and optimization of capital structure and use in the light of the basic assumption that the cprporate entity’s primary duty is to increase the net value of its stock and share holders and investors.

Litrature ReviewPeter K. Cornelius & Bruce Kogut (2003) have garnered opinions of international dimensions regarding capital flow in their book. It is in the context of the global international capital flows and good corporate governance. The definitions are in relation to one another and examines cross border operation of economic theories. It is pertinent to note that one has to restore confidence in the market economy and in the efficient allocation of resources internationally for capital funding.

In this context improvements are required for efficient corporate governance. This theme also was echoed with the addition of equity for small industries and Roger E. Hamlin (2003) proposed in terms of capital aquisition is measured against the total performance predictions. The capital formation can be viewed only in terms of weighted average cost of capital along with the value-based management and risk management are the most important components of corporate finance according Justin Pettit (2006) While the theories so far saw the process as an economic subject we have Neil Seitz, Mitch Ellison (2004) who emphazized budgeting.

Their Capital budgeting theory is elaborate and considers all aspects of the business including marketing. The very basis of the existance of a corporate entity is to see that profits are maximized for the shareholders is the view taken by Chris Agar (2005) Culture of anation and the legal angles also ought to be considered. The essential ingredients of any business activity are land, labour, capital and entrepreneurship.

Land and labour are available to the entrepreneur, but capital is an elusive thing. Entrepreneurs and business come up with very innovative ideas, but often these ideas are not pursued because of the lack of capital. One of the pillars of any business activity is capital. The capital that flows into the system comes from many sources, and in modern times, capital flow is a business by itself called venture capital. While the stock and share market is the traditional method of raising capital, today it is volatile on account of the dot com burst, and on account of global scope of the market.

Every thing that we find happening in the world today affects the capital market. The capital flow is vital to the creation of infrastructure, which is the base of progress. There is a great cycle between the dependent factors, and this review will analyse the thinking of researchers, economists and the entrepreneurs who have shared their experience and thinking through books and other media. With particular emphasis on the subject of capital financing for corporate entities and optimizing cash flow, we will also consider the very nature of capital and its nature from ancient and modern authors.

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