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प्रश्न
Explain the following as factor affecting 'financing decision'.
State of capital markets
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उत्तर
State of the capital market: During the boom period, it is easy to receive funds through equity. On the other hand, during a depression, it becomes difficult to receive funds through equity. Under such circumstances, it is preferable to receive funds through debt.
Bullish Market: Equity preferred
Bearish Market: Debt preferred
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संबंधित प्रश्न
Explain the following as factor affecting dividend decision:
Stability of dividends
Explain the following as factor affecting dividend decision:
Access to capital market
Explain the following as factor affecting 'financing decision'.
Cash flow position of the business
Explain the following as factor affecting 'financing decision'.
Control consideration
Financial management is based on three broad financial decisions. What are these?
Explain the factors affecting the dividend decision.
| Ravi has joined as a finance manager at MTA Ltd. He had to arrange funds of rupees one crore for the company. The Chief Executive Officer of the company wants to arrange the funds by a public issue whereas the finance manager wants to have a mix of debt and equity as this will determine the overall cost of capital and the financial risk of the enterprise. |
- Identify and give the meaning of the financial decision suggested by the finance manager in the above case.
- State any three factors affecting the decision identified in (i) above.
Besides the total amount of long-term finance required, what must a business identify?
Under which area are short-term financing requirements considered?
Which set of outcomes is affected by a financing decision?
What are shareholders’ funds?
What is the nature of debt in a debt-and-equity comparison?
How does debt normally affect ownership control?
What is financial risk?
What generally happens as the proportion of debt in total capital increases?
Which expenses are examples of floatation costs?
Which are examples of fixed operating costs?
Which financing source is favoured by a desire to retain control?
Which sequence correctly orders the seven factors affecting financing decisions?
