A company has a debt-to-equity ratio of 2:1. It plans to raise additional capital such that the overall debt-to-equity ratio becomes 1:1. Assuming…

CA Intermediate · Financial Management and Strategic Management · MTP · September 2025
A company has a debt-to-equity ratio of 2:1. It plans to raise additional capital such that the overall debt-to-equity ratio becomes 1:1. Assuming the company raises only equity for this purpose, by what percentage must the equity increase?
(A) 50%
(B) 100%
(C) 200%
(D) 300%

Suggested Answer and Working Notes:

Correct Answer: Option (B)

100%

Topics: Part-A: Financial Management

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