Question

Tata International Ltd. earned a net profit of Rs.50 crores. Ankit the finance
manager of Tata International Ltd. wants to decide how to appropriate
these profits. Identify the decision that Ankit will have to take and also
discuss any five factors which help him in taking this decision.​

Answer 1

Answer:

Factors affecting financing decisions

Explanation:

1- cost

2- risk

3- floatation

4- cash flow position of the company

5- fixed operation cost

6- control consideration

7- state of capital market

Answer 2

Ankit is expected to make a dividend decision which would depend on the following factors:

Assets and liabilities of the organization

Stability of existing earning channels

Growth opportunities

Suggestions of the shareholders and customers

Legal and contractual constraints

Taxation policy

Explanation:

• A dividend choice would need to be made by the financial manager. The choice is made when the manager must consider the avenues via which the organization's funds must be invested while keeping in mind the current assets and liabilities. The following variables must be taken into account:
• The organization's assets, including annual revenue and profits.
• the consistency of the revenue sources
• the prospects for growth or the avenues through which the organization might prosper.
• the views and recommendations of the customers and stockholders
• the contractual and legal restrictions that could limit growth.
• The company's tax strategy

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