The correct answer is: A. a-1, b-2, c-3, d-4
- a. Issue of equity shares
Equity shares are a type of ownership in a company. When a company issues new equity shares, it is essentially selling a piece of itself to investors. This increases the company’s equity, which is the difference between its assets and liabilities. The debt-equity ratio is calculated by dividing the company’s debt by its equity. Therefore, issuing equity shares will reduce the debt-equity ratio.
- b. Cash received from debtors
Debtors are customers who owe money to the company. When a company collects cash from debtors, it increases its cash balance. This does not affect the company’s debt or equity, so it does not affect the debt-equity ratio.
- c. Redemption of debentures
Debentures are a type of loan that a company takes out from investors. When a company redeems debentures, it pays back the loan to the investors. This reduces the company’s debt, which will reduce the debt-equity ratio.
- d. Purchased goods on credit
When a company purchases goods on credit, it is essentially borrowing money from the supplier. This increases the company’s debt, which will increase the debt-equity ratio.
Therefore, the correct answer is: A. a-1, b-2, c-3, d-4