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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
Vasvi was a student of Commerce in class XII. Her father was a farmer, who grew different varieties of wheat and was well versed about various aspects of wheat cultivation. He was also selected by the government for a pilot-project on wheat cultivation. As a project, she decided to study the feasibility of marketing good quality wheat at the reasonable price. Her father suggested to her to use the internet to gather customers’ views and opinions. She found that there was a huge demand for organic packed wheat. She knew that there were no pre-determined specifications in case of wheat, because of which it would be difficult to achieve uniformity in the output. To differentiate the product from its competitors, she gave it the name of ‘Mahan-organic wheat’ and classified it into three different varieties namely — Popular, Classic and Supreme, based on the quality. She felt that these names would help her in product differentiation.
Explain the three functions of marketing, with reference to the above paragraph
Explain the following as factor affecting dividend decision:
Stability of earnings
Explain the following as factor affecting dividend decision:
Taxation policy
Explain the following as factor affecting dividend decision:
Access to capital market
Explain the following as factor affecting dividend decision:
Legal constraints
Explain the following as factor affecting 'financing decision'.
Control consideration
| Ananta Ltd. is a company dealing in ready-made garments for the last many years. Recently the profit of the company has started increasing. The finance manager decided to retain the profit instead of distributing it among shareholders. |
- Identify and state the financial decision taken by the finance manager in the above case.
- State any three factors affecting the decision identified in (i) above.
What must a business determine about its total finance requirement when making a financing decision?
Besides the total amount of long-term finance required, what must a business identify?
Which set of outcomes is affected by a financing decision?
What is the nature of debt in a debt-and-equity comparison?
What is the nature of equity in a debt-and-equity comparison?
Which payment is compulsory under the borrowing terms?
Which statement describes the general cost of debt compared with equity?
What is financial risk?
What generally happens as the proportion of debt in total capital increases?
Which statement about the cost of sources of finance is correct?
How does lower cost affect the attractiveness of a source of finance?
What financing choice do high fixed operating costs generally favour?
