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The Financing Decisions are affected by:

(A) Floatation Costs

(B) Cash Flow Position of the Company

(C) Fixed Operating Costs

(D) Taxation Policy

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 3

Factors affecting the financing decision include cost, risk, floatation costs, cash flow position, fixed operating costs, control considerations and state of capital market. Taxation policy primarily affects the dividend decision (and cost comparisons), and is not listed as a factor of financing decision. Hence (A), (B) and (C) only.

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