Question

Match List - I with List - II 

• A. (A)-(I), (B)-(II), (C)-(III), (D)-(IV)
• B. (A)-(I), (B)-(III), (C)-(IV), (D)-(II)
• C. (A)-(I), (B)-(III), (C)-(II), (D)-(IV)
• D. (A)-(I), (B)-(IV), (C)-(II), (D)-(III)

Hint:

Credit = Working Capital (short-term). Diversification = Fixed Capital (long-term). Control = Capital Structure (mix of debt and equity). Legal = Dividend decisions (governed by law).

Answer 1

The Correct Option is A

The matching is based on the types of decisions involved in financial management:
(A) - (I): Credit availed affects working capital, which is the short-term financing used to manage the daily operations of a business.
(B) - (II): Diversification, which involves expanding into new markets or products, typically requires fixed capital investment, as these activities involve long-term commitments.
(C) - (III): Control considerations, such as the company's ownership structure, impact capital structure (the balance of debt and equity), which affects the financial risk and return.
(D) - (IV): Legal constraints influence dividend decisions, as legal regulations dictate how profits can be distributed to shareholders or reinvested in the company.