Question

Which of the following factors effect financial dicision?

Answer 1

Answer:

state of the economy.

structure of capital and money market.

government policy.

taxation policy.

investor's requirement.

policy of financial institutions.

nature of the business.

size of the business.

age of the firm.

probability of regular and steady earnings.

liquidity position of the firm.

Explanation:

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Answer 2

The following factors affect the financing decision: (i) Cost: The cost of all the sources of finance is different. The rate of interest on debt, fixed rate of dividend to be paid on preference share capital and the expectations of the shareholders on the equity share capital are in the form of costs.


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