Assuming that the Debt-Equity Ratio is 1:2, state giving reason, whether the ratio will improve, decline or will have no change in case equity shares are issued for cash.
Anurag Gupta (STUDENT) (103 Points)
15 February 2013Assuming that the Debt-Equity Ratio is 1:2, state giving reason, whether the ratio will improve, decline or will have no change in case equity shares are issued for cash.
Manoj chopra
(article)
(128 Points)
Replied 15 February 2013
lets debt =100000 and equity =200000 equity issued of rs. =100000
now ratio will be =1:3 i.e decrease
Aman
(Finance Professional)
(604 Points)
Replied 15 February 2013
obvously it will decrease due to increase in equity share capital which is at denominator and there will be no change in Debt...
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