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Financial Management
Explain, in brief, any three decisions involved in financial management.
Following are the main decisions which are involved in financial management:
(i) Investment Decision: It refers to the selection of assets in which funds will be invested by the business. In other words, these decisions are concerned with the effective utilisation of funds in one activity or other.
(ii) Financing Decision: It refers to the determination as to how the total funds required by the business will be obtained from various long-term sources.
(iii) Dividend Decision: It refers to the determination of how much part of the earning should be distributed among shareholders by the way of dividend and how much should be retained for meeting future needs as retained earning.
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What is meant by Financial Management?
Every manager has to take three major decisions while performing the finance function. Explain them.
Explain any six factors affecting the financing decision of a company.
Explain any six factors affecting the dividend decision of a company.
What is meant by Dividend decision? State any four factors affecting the Dividend decision.
What is meant by Financing decision? State any four factors affecting the financing decision.
Explain briefly the factors affecting the investment decision.
Explain, in brief, any five factors that should be taken into consideration while determining the long-term dividend policy.
Or
Explain factors affecting the dividend policy of a company.
“Determining the relative proportion of various types of funds depends upon various factors”. Explain any five such factors.
Or
“Determining the overall cost of capital and the financial risk of the enterprise depends upon various factors”. Explain any five such factors.
Investment decision can be long-term or short-term. Explain long-term investment decision and state any two factors affecting this decision.
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