The Investment Decision, the Financing Decision and the Dividend Decision Are Sides of the Financial Management Triangle with Visible Interface. Examine This Statement Critically
THE INVESTMENT DECISION, THE FINANCING DECISION AND THE DIVIDEND DECISION ARE SIDES OF THE FINANCIAL MANAGEMENT TRIANGLE WITH VISIBLE INTERFACE. EXAMINE THIS STATEMENT CRITICALLY
A SEMINAR PAPER PRESENTED IN PARTIAL FULFILMENT OF COURSE REQUIREMENT FOR MANAGERIAL FINANCE
BY
EMUCHAY KENNETH AZUBUIKE
M.SC / FINANCE
MATRIC NO: LUC/PG/09/
LEAD CITY UNIVERSITY, IBADAN
LECTURER: PROF WOLE ADEWUMI
INTRODUCTION:
In illustrating the relationship between the investment, financing and dividend decision angles of financial management we would first need to have a clear understanding of the concept of financial management as it relates to economic organizations. Financial management can be loosely defined as the sum total of all the activities involved in the management of the monetary resources available to an organization. More concisely it involves the planning, directing, monitoring, organizing and controlling of the monetary resources of an organization. It involves all the processes by which an organization acquires, allocates and spends the finances available to it. The management of the finances of an organization involves several decisions to be made in both the routine and non habitual activities of the organization and these decisions can be loosely categorized into three classes. The investment decision, financing decision, dividend decision. These decisions are based on several managerial criteria as illustrated below:
- In order to maximize the shareholder wealth, the question is raised. Which investments should the firm undertake? The investment decision.
- When an investment project has been decided on, it must be appropriately financed and that raises the questions of how, where, when and how much finance should be raised? The financing decision.
- How the returns from the business operation would be shared? The dividend decision.
These three
A SEMINAR PAPER PRESENTED IN PARTIAL FULFILMENT OF COURSE REQUIREMENT FOR MANAGERIAL FINANCE
BY
EMUCHAY KENNETH AZUBUIKE
M.SC / FINANCE
MATRIC NO: LUC/PG/09/
LEAD CITY UNIVERSITY, IBADAN
LECTURER: PROF WOLE ADEWUMI
INTRODUCTION:
In illustrating the relationship between the investment, financing and dividend decision angles of financial management we would first need to have a clear understanding of the concept of financial management as it relates to economic organizations. Financial management can be loosely defined as the sum total of all the activities involved in the management of the monetary resources available to an organization. More concisely it involves the planning, directing, monitoring, organizing and controlling of the monetary resources of an organization. It involves all the processes by which an organization acquires, allocates and spends the finances available to it. The management of the finances of an organization involves several decisions to be made in both the routine and non habitual activities of the organization and these decisions can be loosely categorized into three classes. The investment decision, financing decision, dividend decision. These decisions are based on several managerial criteria as illustrated below:
- In order to maximize the shareholder wealth, the question is raised. Which investments should the firm undertake? The investment decision.
- When an investment project has been decided on, it must be appropriately financed and that raises the questions of how, where, when and how much finance should be raised? The financing decision.
- How the returns from the business operation would be shared? The dividend decision.
These three
References: Michael Potton Corporate Financial Management 5th edition Accounting Management 5th edition http://en.wikipedia.org/wiki/corporate_finance www.stonebridge.uk.com http://tutor2u/business/accounts/finance_managment_intro.htm www.economywatch.com Nigeria institute of Management