The directors of a company decided to issue debentures worth 70,00,000 in order to finance their expension plan this would lead to increase in the debt equity ratio form 2:1to 3:1 but at the same time increase the Earning per share. (1) Which financial decision is being taken by the directors? Explain it. (b) Which concept of Financial Management is referred to? (c) Discuss four factors that they need to consider before taking this decision.
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1...Financial decision is a process which is responsible for all the decisions related with liabilities and stockholder's equity of the company as well as the issuance of bonds. Establish your financial goals: Setting the goals you want to achieve and the risk that you would be able to suffer. ..
2..Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.
3...
- Ask Yourself What You Really Want. ...
- Ask For Advice. ...
- Question Your Motives. ...
- Weigh The Pros & Cons. ...
- Ask Yourself If You Will Be Hurting Yourself Or Others With Your Future Decision.
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