The problem and scope of corporate finance has been defined by the Encyclopaedia of Social Sciences Vol. IV in the following words : “Corporation finance deals with the financial problems of corporate enterprises.
These problems include the financial aspects of the promotion of new enterprises and their administration during early development, the accounting problems connected with the distinction between capital and income, the administrative questions created by growth and expansion, and finally, the financial adjustments required for the bolstering up or rehabilitation of a corporation which has come into financial difficulties.”