General Studies · Strategic Financial Management
Which of the following best describes the relationship between financial policy and corporate strategy?
- 1Financial policy deals only with short-term working capital, while corporate strategy deals only with long-term growth.
- 2Corporate strategy is derived purely from financial policy decisions such as dividend payout and financing mix.
- 3Financial policy is subordinate to corporate strategy, in that the financial policy must support and enable the corporate strategy.✓
- 4Financial policy and corporate strategy are completely independent and do not affect each other.
Correct answer
Financial policy is subordinate to corporate strategy, in that the financial policy must support and enable the corporate strategy.
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