Question:
Which of the following is NOT a factor affecting 'financing decision'?
Which of the following is NOT a factor affecting 'financing decision'?
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Financing decisions depend on factors like risk, cost of capital, and control but not on diversification strategies.
Updated On: Feb 24, 2025
- Fixed operating costs
- Cash flow position
- Control considerations
- Diversification
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The Correct Option is D
Solution and Explanation
Step 1: Understanding financing decisions.
- Financing decisions are influenced by factors like cash flow position, control considerations, and fixed operating costs, which determine the proportion of debt and equity.
- Diversification pertains to expansion into new markets or products and is not directly related to financing decisions.
Step 2: Analyzing the options.
Among the given options, diversification is unrelated to financing decisions.
Conclusion: The correct answer is (D) Diversification.
- Financing decisions are influenced by factors like cash flow position, control considerations, and fixed operating costs, which determine the proportion of debt and equity.
- Diversification pertains to expansion into new markets or products and is not directly related to financing decisions.
Step 2: Analyzing the options.
Among the given options, diversification is unrelated to financing decisions.
Conclusion: The correct answer is (D) Diversification.
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