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5. Fihahclal mahagement decisions and their effect oh tIPm Valle Financial managers make a variety of decisions that can affect a firm's value. These include capital budgeting, capital structure, and dividend policy decisions. A financial manager's decisions and actions are evaluated against the criterion of their effect on the price of the firm's common stock. Good decisions result in increasing share prices and increasing shareholder wealth, while poor decisions achieve the opposite result. Many of the financial decisions that affect shareholder value fall into one of three basic categories. Identify the types of managerial finance decisions described in the following table. Type of Decision Capital structure What types of assets should be purchased to support new projects and generate future cash flows? The stock market is approaching its year-to-date high value, so should Phoenix Golf Club Company consider selling new stock or new bonds to pay for its planned market expansion? Capital budgeting Should a company decrease its dividend from $0.75 per share to $0.60 per share? Dividend policy