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    Question

    Refer to the following information to answer the next 4 questions (Q11 to Q14)

    Calculate the Debt Equity ratio of the

    company?
    A 0.31 Correct Answer Incorrect Answer
    B 0.33 Correct Answer Incorrect Answer
    C 0.49 Correct Answer Incorrect Answer
    D 0.45 Correct Answer Incorrect Answer
    E 0.91 Correct Answer Incorrect Answer

    Solution

    D/E ratio= Debt/Shareholders Fund D/E ratio = 100000/305000= 0.327 (0.33 approx.)   Debt= 1,00,000 (Debentures) Shareholders Fund= Equity Share + Preference Share + General Reseve – Preliminary expenses 2,00,000 + 1,00,000 + 20,000 – 15,000 = 3,05,000

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