Decision in Finance
Decision in Finance
Decision in Finance
FINANCE
Financing Decision
○ It is concerned with the financing – mix or
capital structure of leverage.
○ It is concerned with the amount of finance to
be raised from various long term sources of
funds like equity shares, preference shares,
debentures, and bank loans.
Factors Affecting Financing
Decision
Risk – involved in raising funds
- the risk is higher in the case of debt
as compared to the equity
Cost – also in raising fund
- the manager chose the source with
minimum cost
Level of control – the shareholders want in the
organization also determines the
composition of capital structure
Cash flow position
– regular day to day earning of
the company .
Condition of the market