The Impact Of Interest Rates On Firms Financial Decisions

Abstract

Financial decisions are the decisions that managers take with regard to the finances of a company. This article aims to examine and explain the effect of interest rates on economic and financial decisions such as investment, funding, and dividend in a firm. This research uses the correlation coefficient analysis methods and descriptive methods to illustrate the relationship between interest rates and financial decisions. The data used in this research was obtained from several government reports and leading economic sources. The results of this research show that interest rates have a negatively insignificant effect on investment and funding decisions, but positively moderate effect on dividend decisions.

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