The financing decision determines how firms raise cash to pay for their investments.

Question

Quizplus · Accepted Answer

The financing decision is one of the three major decisions in financial management and it deals with how companies raise money to pay for their investments. This decision includes analysis of different sources of funding such as debt, equity, and retained earnings, and making decisions on which sources to use and in what proportion.

The Financing Decision Determines How Firms Raise Cash to Pay