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This decision determines the overall cost of capital and the financial risk of the enterprise,
Dividend decision
Capital budgeting decision
Investment decision
Financing decision
- Dividend Decision: Determines how much profit will be distributed to shareholders. It involves deciding the portion of earnings to retain versus pay out as dividends.
- Capital Budgeting Decision: Involves selecting which long-term projects or investments an organization should take on. It primarily focuses on expenditures that shape the firm's future growth.
- Investment Decision: Entails deciding how to allocate capital to projects or assets that yield the best returns aligned with the company's strategic goals.
- Financing Decision: Determines the sources of funding for company operations and growth. It affects the cost of capital and the corresponding financial risk, as it involves choosing between equity, debt, or other financial instruments.
? Financing Decision impacts the overall cost of capital and financial risk.
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