Name the concept of financial management | Class 12 Business Studies Chapter Financial Management, Financial Management NCERT Solutions

Question:

Name the concept of financial management which increases the return to equity shareholders due to the presence of fixed financial charges.

Answer:

The concept of financial management which increases the return to equity shareholders due to the presence of fixed financial charges is Trading on Equity. It is advisable to use trading on equity when the rate of return on investment is more than the rate of interest payable on debentures and loans.


Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

  • Read the question carefully and focus on the core concept being asked.
  • Reference examples and data from the chapter when answering questions about Financial Management.
  • Review previous year question papers to get an idea of how such questions may be framed in exams.
  • Practice answering questions within the time limit to improve your speed and accuracy.
  • Discuss your answers with your teachers or peers to get feedback and improve your understanding.

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Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 3: Name the concept of financial management which increases the return to equity shareholders due to th....