Sourcing funds to finance an organization’s activities is one of the most critical strategic decisions every organization must make, as it constitutes the fulcrum which propels organizational growth and survival. This aspect of an organization is fundamental, strategic, and comprehensive, requiring concerted efforts from management, especially in the modern, technology-driven environment where businesses operate. Inappropriate financing decisions could mar corporate progress and deter it from achieving the very objective the organization was incorporated to pursue. On the other hand, artificial intelligence has assumed a pervasive dimension sweeping virtually every facet of corporate and individual lives. AI tools have proven to be effective in carrying out tasks which were hitherto done by humans and are worthy and dependable allies in navigating through some of the strategic decision-making duties of corporate managers. In this chapter, the concepts of corporate finance and artificial intelligence were copiously examined through the lens of the Modigliani and Miller, pecking order, and technology acceptance model theories. Also, we analyze the place of artificial intelligence tools in shaping corporate financing decisions. Specifically, the impervious role of AI tools in each corporate finance aspect, including capital budgeting, capital structure, dividend policy, financial planning and analysis, merger and acquisition decision, working capital management, portfolio management, and investor relations, was examined. The chapter highlighted a few organizations that have deployed AI in their corporate finance activities and concluded with some of the limitations of AI applications in corporate finance.

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Artificial Intelligence Tools and Use Cases in Corporate Finance

  • Mohammed Kayode Ajape,
  • Adesanmi Timothy Adegbayibi

摘要

Sourcing funds to finance an organization’s activities is one of the most critical strategic decisions every organization must make, as it constitutes the fulcrum which propels organizational growth and survival. This aspect of an organization is fundamental, strategic, and comprehensive, requiring concerted efforts from management, especially in the modern, technology-driven environment where businesses operate. Inappropriate financing decisions could mar corporate progress and deter it from achieving the very objective the organization was incorporated to pursue. On the other hand, artificial intelligence has assumed a pervasive dimension sweeping virtually every facet of corporate and individual lives. AI tools have proven to be effective in carrying out tasks which were hitherto done by humans and are worthy and dependable allies in navigating through some of the strategic decision-making duties of corporate managers. In this chapter, the concepts of corporate finance and artificial intelligence were copiously examined through the lens of the Modigliani and Miller, pecking order, and technology acceptance model theories. Also, we analyze the place of artificial intelligence tools in shaping corporate financing decisions. Specifically, the impervious role of AI tools in each corporate finance aspect, including capital budgeting, capital structure, dividend policy, financial planning and analysis, merger and acquisition decision, working capital management, portfolio management, and investor relations, was examined. The chapter highlighted a few organizations that have deployed AI in their corporate finance activities and concluded with some of the limitations of AI applications in corporate finance.