CA Inter P6 · Chapter 1 · Question 2 of 7
The board of Saraswati Polymers Ltd is deciding what proportion of a new ₹ 40 crore project should be funded by debentures and what proportion by issuing equity shares. This is an example of a:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Financing decision
Explanation
Deciding the mix of debt and equity used to raise funds is a financing decision, which shapes the capital structure. Whether to take up the project at all would be the investment decision. A dividend decision concerns how much of the profit to distribute and how much to retain.
More Scope and Objectives of Financial Management MCQs
- Q4The conflict of interest that can arise when managers, acting as agents, pursue perks and job security rather than maximising the wealth…
- Q5Which of the following is an example of an agency cost borne by shareholders?
- Q6In a large company, the function usually split between the Treasurer and the Controller is best described as:
- Q7Under the modern approach to financial management, the finance manager's role is best described as: