This question was previously asked in
Shift 28/05/2023 3:30 PM - 6:30 PM
Correct Answer
The financing decisions are affected by various factors which are as follows:
Cost: The cost of raising funds through different sources Is different. A good financial manager would normally opt for a source which is the cheapest.
Risk: The risk associated with each of the sources is different.
Flotation Costs: Higher the flotation cost, less attractive is the source.
Cash Flow position of the company: A stronger cash flow position may make debt financing more viable than funding through equity
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