Match List I with List II
| List I | List II |
|---|---|
| A. Investment decisions | I. Source of raising finance |
| B. Financing decisions | II. Proportion of debt and equity |
| C. Dividend decisions | III. Long term or short term assets |
| D. Capital Structure | IV. Amount of money to be retained |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → A-III, B-I, C-IV, D-II
(A) Investment decisions → (III) Long term or short term assets — The investment decision is about how the firm’s funds are invested in different assets, and it can be long-term or short-term.
(B) Financing decisions → (I) Source of raising finance — The financing decision starts with identifying the various sources from which funds can be raised.
(C) Dividend decisions → (IV) Amount of money to be retained — The dividend decision is how much profit is paid to shareholders and how much is kept (retained) in the business.
(D) Capital Structure → (II) Proportion of debt and equity — Capital structure is the mix between owners’ funds (equity) and borrowed funds (debt).
NCERT (2026-27 Edition): “Investment Decision A firm’s resources are scarce in comparison to the uses to which they can be put. A firm, therefore, has to choose where to invest these resources, so that they are able to earn the highest possible return for their investors. The investment decision, therefore, relates to how the firm’s funds are invested in different assets.” “Investment decision can be long-term or short-term. A long-term investment decision is also called a Capital Budgeting decision. …” “Financing Decision … It involves identification of various available sources. The main sources of funds for a firm are shareholders’ funds and borrowed funds. …” “Dividend Decision The third important decision that every financial manager has to take relates to the distribution of dividend. Dividend is that portion of profit which is distributed to shareholders. The decision involved here is how much of the profit earned by company (after paying tax) is to be distributed to the shareholders and how much of it should be retained in the business. …” “Capital Structure … Capital structure refers to the mix between owners and borrowed funds. These shall be referred as equity and debt in the subsequent text. …” |