Question

The cheapest source of finance is

(a) debenture

(b) equity share capital

(c) preference share

(d) retained earning

Answer 1

Answer:

The cheapest source of finance is retained earning

Among the given options option (d) retained earning is a correct answer

Explanation:

The net earnings of company are divided into two parts dividend and retained earnings.

When a part of earnings is retained with the company for reinvestment in the business, it is known as retained earnings. Deciding the proportion of dividend to be paid and retained earnings is called dividend decision.

HOPE THIS ANSWER WILL HELP YOU…

 

Here are more questions of the same chapter :  

A decision to acquire a new and modern plant to upgrade an old one is a:

a. financing decision  

b. working capital decision  

c. investment decision

d. None of the above  

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Companies with a higher growth pattern are likely to:

a. pay lower dividends  

b. pay higher dividends  

c. dividends are not affected by growth considerations

d. none of the above  

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Answer 2

Answer:

the ans is a) debentures

this question has already appeared in my exam n the correct ans was debentures