Describe the major financial problems of a firm
The three questions posed above cover between them the major financial problems of a firm. Or we can say that financial management, according to the new approach, is concerned with the solution of three key problems relating to the financial operations of a firm, corresponding to three questions of investment, financing and dividend decisions. Hence, financial management, in modem sense of the term, can be broken down into 3 major decisions as functions of finance: (i) Investment decision, (ii) Financing decision (iii) Dividend policy decision.