Consider the below mentioned statements: A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of…

CA Intermediate · Financial Management and Strategic Management · RTP · September 2025
Consider the below mentioned statements: A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt.The cost of floating a debt is greater than the cost of floating an equity issue. State True or False:
(A) 1-True, 2-True
(B) 1-False, 2-True
(C) 1-False, 2-False
(D) 1-True, 2-False

Suggested Answer and Working Notes:

Correct Answer: Option (D)

1-True, 2-False

Topics: Part-A: Financial Management

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