Holding all other variables constant, which of the following would increase a firm's external funding requirements in the planning period?
A)An increase in assets
B)A decrease in accruals
C)An increase in dividends paid
D)Both a & c
E)All of the above

Question

Quizplus · Accepted Answer

All the options listed would increase a firm's external funding requirements. An increase in assets (A) would require more funding to finance the additional assets. A decrease in accruals (B) means less non-cash earnings are being counted towards income, which could necessitate more external funding to cover operations or investments. An increase in dividends paid (C) would require more cash, potentially leading to a need for external financing if internal funds are insufficient.

Holding All Other Variables Constant, Which of the Following Would