Chapter – IX

Financial Management
(5+5 = 10 Marks) 60-80 words

State 5 factors that determine/affect the CAPITAL STRUCTURE of a company? (very important)

Financial leverage:

The financial manager should carefully examine how the use of the proposed financing mix will affect the risk and returns of the owners.

The financial leverage used by the company will depend on the amount of risk the company would like to take.

Flexibility:

The capital structure of the company should be flexible enough to -

Adapt to changing conditions whenever required.

• Raise additional funds without undue delay and cost..................