Practice free →
Home › Bihar Board Class 12 (Commerce) › Accountancy › Analysis of Financial Statements: Tools and Accounting Ratios › Redeeming debentures of a firm will have what ef…

Redeeming debentures of a firm will have what effect on its debt-equity ratio?

AIt stays unchanged
BIt increases
CIt decreases
DIt becomes zero
Answer & Solution
Correct answer: C. It decreases
Redemption lowers long-term debt while equity stays the same, so the ratio falls.
Solve this in the app — Bihar Board Class 12 (Commerce) practice & 24k+ MCQs →
Related questions