alleryStart learning →A gearing ratio of 1.5:1 means how much debt for each unit of equity?
A15 of debt per 1 of equity
B1 of debt per 1.5 of equity
C1.5 of debt per 1 of equity
D0.5 of debt per 1 of equity
Answer & Solution
Correct answer: C. 1.5 of debt per 1 of equity
The ratio is stated as debt to equity, so 1.5:1 means one and a half units of debt per unit of equity.
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