Factors affecting Financing Decisions includes :

A. Cost

B. Risk

C. Floatation cost

D. Cash flow position of the company

E. Taxation Policy

Choose the correct answer from the optiosn given below :

A, B, C and D only

The correct answer is option (4) : A, B, C and D only

Cost: The cost of raising funds through different sources are different. A prudent financial manager would normally opt for a source which is the cheapest

Risk: The risk associated with each of the sources is different

Floatation Costs: Higher the floatation cost, less attractive the source

Cash Flow Position of the Company: A stronger cash flow position may make debt financing more viable than funding through equity