The _____ decision determines the overall cost of capital and the financial risk of the enterprise.

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Solution

(a) Capital budgeting decision

(b) Investment decision

(c) Dividend decision

(d) Financing decision

Answer (d) Financing decision

Explanation: The financing decision is a pivotal choice that will be made by the management. The choice is about the financing blend of an association. The financing decision is centered around the borrowings and allotment of funds needed for the investment decisions of the firm.

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