Question

What are the factors that affect financing decisions?

1. Cash flow position of the company
2. Stability of earnings
3. Degree of financial risk
4. Contractual constraints
5. State of capital market
6. Level of competition

Choose the correct alternative from the following:

Options

• (b), (c) and (f)

• (d), (e) and (f)

• (a), (c) and (d)

• (a), (c) and (e)

Answer 1

(a), (c) and (e)

Explanation:

The cash flow position of the company (a), the degree of financial risk (c), and the state of the capital market (e) are critical factors influencing financing decisions as they determine the company's ability to raise funds and the cost of financing.