Home › CBSE Class 12 (Commerce) › Business Studies › Financial Management › Trading on equity is a rise in equity holders' p…
Trading on equity is a rise in equity holders' profit due to which charges?
AVariable selling costs
BFixed financial charges
CDepreciation only
DDividend arrears
Answer & Solution
Correct answer: B. Fixed financial charges
Fixed charges such as interest on debt let equity holders keep the surplus return above that cost.
Related questions
Higher inflation affects working capital requirement how?A larger lead time for raw materials means what for working capital?Credit availed from suppliers affects working capital requirement how?A liberal credit policy towards customers raises which requirement?A longer production cycle leads to what working capital need?During a boom, working capital requirement is typically what?Current liabilities are payment obligations due within what period?Which current asset is the most liquid?