MANAGEMENT

Detailed explanation-1: -A financial decision which is concerned with the amount of finance to be raised from various long term sources of funds like, equity shares, preference shares, debentures, bank loans etc. Is called financing decision. In other words, it is a decision on the ‘capital structure’ of the company.

Detailed explanation-2: -(ii) Financing decision It deals with quantum of finance to be raised from long-term sources, viz debt equity. In other words, it refers to the determination as how the total funds required by the business will be obtained from various long-term sources.

Detailed explanation-3: -Financial decisions-They relate to the raising of finance from various resources which will depend upon decision on type of source, period of financing, cost of financing and the returns thereby.

Detailed explanation-4: -Long-term financing involves the choice between debt (bonds) and equity (stocks). Each firm chooses its own capital structure, seeking the combination of debt and equity that will minimize the costs of raising capital.

Detailed explanation-5: -Simply, selecting the type of assets in which the funds will be invested by the firm is termed as the investment decision.