Académique Documents
Professionnel Documents
Culture Documents
INVESTMENT FINANCING
DECISION DECISION
DIVIDEND WORKING
DECISION CAP.DECIS
ION
INVESTMENT DECISION :
What business to be in ?
What growth rate is appropriate ?
What assets to acquire ?
FINANCING DECISION
What mix of debt and equity to be used ?
Can we change the value of the firm by changing the
capital mix ?
Is there an optimal debt-equity mix ?
DIVEDEND DECISIONS :
How much of the profit should be retained in the business and how
much to be distributed as dividend ?
Can we change the value of the firm by changing the amount of
dividend ?
What should be the mode of dividend payment ?
WORKING CAPITAL DECISIONS :
What level of inventory of goods is ideal ?
What level of credit should be given to the customers ?
What level of cash should be maintained ?
How can the blockage of funds in the current assets be minimized
without compromising profits ?
PRIMARY SECONDARY
VALUE MAXIMISATION
Acquire temporary
Working capital Acquire fixed
Assets &
Permanent W.C
Generate net cash
Inflows from operations
BUSINESS FIRMS
DEPOSITS/POLICIES GOVERNMENT
FOREIGNERS
FUNDS SHARES/BONDS
FUNDS
FUNDS
FINANCIAL INSTITUTIONS FINANCIAL MARKETS
P.P
BANKS MODE MONEY MARKET
PROVIDENT FUNDS
SHARES/BONDS CAPITAL MARKET
INSURANCE COMPANIES
LOANS INVESTORS/BORROWERS
HOUSE HOLDERS
FUNDS
BUSINESS FIRMS
GOVERNMENT
FOREIGNERS
FUNDS
SHARES/BONDS
6/17/10 PROF. N.N.PANDEY 1212
Abhinit