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Question 13 Financial decisions of the firm are guided by a. Retention Ratio b. Firm’s Wealth...

Question 13

Financial decisions of the firm are guided by

a.

Retention Ratio
b.

Firm’s Wealth
c.

Risk-Return Trade Off
d.

Financial Leverage
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Homework Answers

Answer #1

Option C is correct. Risk-Return Trade Off.

The concept of higher return associated with high retruns, also, the lower return associated with lower risk, is called Risk Return Trade off.  Financing decisions revolve around how to pay for investments and expenses.

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