Corporate Financial Management Decisions During COVID-19

Abstract

Financial decisions such as investment and financing will have to be made in accordance with the environmental conditions prevailing in a particular time. This chapter will focus on the corporate financial decisions during the current pandemic situation. In financing decisions, cost of capital is the determining factor, and accordingly, financing modes are preferred by the organizations. Financial decisions made in a difficult time are resulting in negative cash profits in most of the cases. With the ongoing COVID-19 crisis, the stock markets suffered a severe shock resulting in negative returns, and the stock market crash risk has become higher than normal. COVID-19 has made the financing and investment markets more challenging. Financing decisions are the hardest decisions that companies could make during COVID-19 times as the cost of capital might skyrocketed and the companies themselves would find their profits declining significantly. Corporates must now be thinking seriously about alternative sources of funding for their business requirements.