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Match the LIST-I with LIST-II

LIST-I (Type of Decision or Requirement)LIST-II (Factors affecting)
A. Dividend DecisionI. Fixed operating costs
B. Financing DecisionII. The investment criteria involved
C. Capital Budgeting DecisionIII. Business Cycle
D. Working Capital requirementIV. Shareholder's preference

Choose the correct answer from the options given below:

Solution

Correct Option: 4

Dividend decision is affected by shareholders' preference (IV); financing decision by fixed operating costs, which raise business risk and reduce debt capacity (I); capital budgeting by the investment criteria involved (II); working capital requirement by the business cycle (III). Hence A-IV, B-I, C-II, D-III.

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