{"id":49939,"date":"2024-04-15T23:03:05","date_gmt":"2024-04-15T23:03:05","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=49939"},"modified":"2024-04-15T23:03:05","modified_gmt":"2024-04-15T23:03:05","slug":"given-debentures-rs-500000-equity-share-capital-rs-2500000-cash-rs-100000-debtor-rs-200000-debt-equity-ratio-will-be","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/given-debentures-rs-500000-equity-share-capital-rs-2500000-cash-rs-100000-debtor-rs-200000-debt-equity-ratio-will-be\/","title":{"rendered":"Given: Debentures = Rs. 5,00,000 Equity share capital = Rs. 25,00,000 Cash = Rs. 1,00,000 Debtor = Rs. 2,00,000 Debt Equity Ratio will be"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a97467bb199d\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    05:01                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    0.2 : 1                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"true\">\r\n                    5.6 : 1                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    None of these                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>C. 5.6 : 1<\/strong><\/p>\n<p>Debt-equity ratio is a measure of a company&#8217;s financial leverage. It is calculated by dividing the company&#8217;s total debt by its total equity. A high debt-equity ratio indicates that a company is using a lot of debt to finance its operations. This can be risky, as it means that the company is more likely to go bankrupt if it is unable to repay its debts.<\/p>\n<p>In this case, the company has total debt of Rs. 5,00,000 and total equity of Rs. 25,000,000. This gives a debt-equity ratio of 5.6 : 1. This is a relatively high debt-equity ratio, which indicates that the company is using a lot of debt to finance its operations.<\/p>\n<p>Option A is incorrect because it is the <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n         <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>        <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> equity-debt ratio, not the debt-equity ratio. The equity-debt ratio is calculated by dividing the company&#8217;s total equity by its total debt. A high equity-debt ratio indicates that a company is using a lot of equity to finance its operations. This is generally considered to be a safer financial position than using a lot of debt.<\/p>\n<p>Option B is incorrect because it is the debt-to-asset ratio, not the debt-equity ratio. The debt-to-asset ratio is calculated by dividing the company&#8217;s total debt by its total assets. A high debt-to-asset ratio indicates that a company is using a lot of debt to finance its operations. This can be risky, as it means that the company is more likely to go bankrupt if it is unable to repay its debts.<\/p>\n<p>Option D is incorrect because it is not a valid debt-equity ratio.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Given: Debentures = Rs. 5,00,000 Equity share capital = Rs. 25,00,000 Cash = Rs. 1,00,000 Debtor = Rs. 2,00,000 Debt Equity Ratio will be<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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