Debt equity ratio of a company is 1 2 Which of the following transactions will increase it ........

General Accounting Principles Ratio analysis

Debt equity ratio of a company is 1 : 2. Which of the following transactions will increase it:

Issue of new shares for cash

Redemption of Debentures

Issue of Debentures for cash

Goods purchased on credit

Issue of Debentures for cash as debentures will increase and equity will remain unchanged . Hence, debt to equity ratio will improve.

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