How ‘Capital market conditions’ are important in the capital structure decision?

Solution

Capital market conditions refer to upward or downward trends in capital market. Both these conditions have their influence on the selection of sources of finance. When the market is dull, investors are mostly afraid of investing in share capital due to high risk. On the contrary, when conditions in capital market are cheerful, they treat investment in share capital as the best choice to reap profits. Companies should, therefore, make selection of capital sources keeping in view the conditions prevailing in capital market.

Some More Questions From Financial Management Chapter

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.

Identify the financial decision which determines the amount of profit earned to be distributed and to be retained in the business. Explain any four factors affecting this decision.

For Daily Free Study Material Join wiredfaculty

Financial Management

How ‘Capital market conditions’ are important in the capital structure decision?

Some More Questions From Financial Management Chapter

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.

Identify the financial decision which determines the amount of profit earned to be distributed and to be retained in the business. Explain any four factors affecting this decision.

Explain, in brief, any three decisions involved in financial management.

What is meant by investment decision?

Mock Test Series

NCERT Sample Papers

Entrance Exams Preparation

Phone Number

Email Address

Loaction

For Daily Free Study Material Join wiredfaculty

Financial Management

How ‘Capital market conditions’ are important in the capital structure decision?

Some More Questions From Financial Management Chapter

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.OrExplain 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.

Identify the financial decision which determines the amount of profit earned to be distributed and to be retained in the business. Explain any four factors affecting this decision.

Explain, in brief, any three decisions involved in financial management.

What is meant by investment decision?

Mock Test Series

NCERT Sample Papers

Entrance Exams Preparation

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.