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Question : X Ltd has a debt-equity ratio at 3 : 1. According to the management it should be maintained at 1 : 1. What are the choice in front of the management to do so -

Option 1: Increase Equity

Option 2: Redeuce debt

Option 3: Both of the above

Option 4: None of the above


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Both of the above


Solution : The company must either increase equity, decrease debt, or do both in order to balance the debt to equity ratio.

Hence the correct answer is option 3.

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