These are concerned with how a firm decides whether, for example, to buy plant and equipment or introduce a new product to the market.
These are concerned with such matters as how a firm should be financed – solely by equity (shares) or by a combination of equity and debt, and in what proportions.
The dividend decision
An important aspect of ‘financing decisions’ is the ‘dividend decision’; this is concerned with whether or not a firm should pay a dividend and, if one is to be paid, how much that dividend should be.
Risk management decisions
These are concerned with how a business manages risk in relation to investment decisions, financing decisions and liquidity, currency and credit decisions.