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What are the… (Class 12 Business Studies SQP 2024-25, Q18)

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Business StudiesCBSE Class 12 · Sample paper, session 2024-25 · 1 mark · MCQ

CBSE Class 12 Business Studies sample paper 2024-25: question 18

From the official CBSE sample question paper for 2024-25, section A, question 18, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q18 · 1 mark · MCQFinancial Management

What are the factors that affect financing decisions?
(a) Cash flow position of the company
(b) Stability of earnings
(c) Degree of financial risk
(d) Contractual constraints
(e) State of capital market
(f) Level of competition
Choose the correct alternative from the following:

  1. (A)(b), (c) and (f)
  2. (B)(d), (e) and (f)
  3. (C)(a), (c) and (d)
  4. (D)(a), (c) and (e)

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Which factors belong to the dividend decision?

Hint 2

Debt needs cash to pay interest: which factor does that suggest?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Stability of earnings and contractual constraints affect the dividend decision; level of competition affects working capital, not financing.

  2. Cash flow position, degree of financial risk and state of the capital market affect the financing decision. Option (D).

    1 mark

Answer: (D) (a), (c) and (e)

Where the marks are

  • Factors of financing decision (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Financial Management, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.