For the Financial Manager Who Cannot Decide on a Suitable

question 30

Multiple Choice

For the financial manager who cannot decide on a suitable level of gearing, which of the following is the best guideline?

• A) Keep gearing to a minimum
• B) Aim to achieve the maximum possible levels of gearing
• C) Adopt the gearing used by average firms in the industry
• D) Gear at the level of tax exhaustion

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Definitions:

Planning

Process of anticipating future events and conditions and determining courses of action for achieving organizational objectives.

Organizational Objectives

Specific, measurable goals set by a business or organization to guide its operations and strategic decisions.

Management

The process of planning, organizing, directing, and controlling the resources of an organization to achieve its goals efficiently and effectively.

Analyze

To examine something in detail in order to understand it better or discover more about it.