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Andrew co is a large listed company financed both by equity and debt.
In which of the following areas of financial management will the impact of working capital management be smallest?a)Liquidity management
b)Interest rate management
c)Management of relationship with bank
d)Dividend policySir correct ans is D but please can you explain
It should be obvious to you that (a), (b), and (c) are all impacted by working capital management.
Dividend policy is the policy as to what % of earnings to pay out as dividend, and this is nothing really to do with how they go about managing their working capital. It is a policy as to how much they want to give to shareholders and how much they want to reinvestment in order to achieve future growth.
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