The directors of a manufacturing company are thinking of issuing Rs. 20 lacs additional debentures for...
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The directors of a manufacturing company are thinking of issuing Rs. 20 lacs additional debentures for expansion of their production capacity. This will lead to an increase in debt-equity ratio from 2: 1 to 3: 1. What are the risks involved in it? What factors other than risk do you think the directors should keep in view before taking the decision? The directors of a manufacturing company are thinking of issuing Rs. 20 lacs additional debentures for expansion of their production capacity. This will lead to an increase in debt-equity ratio from 2: 1 to 3: 1. What are the risks involved in it? What factors other than risk do you think the directors should keep in view before taking the decision?
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A debttoequity ratio measures the amount of debt a company uses to fund its business for every dollar of equity it has The ratio equals total liabilit... View the full answer
Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
Posted Date:
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