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प्रश्न
When is Trading on Equity advisable?
पर्याय
When EPS decreases as debt increases
When RoI < Cost of Debt
When EBIT is Nil
When RoI > Cost of Debt
MCQ
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उत्तर
Trading on Equity is advisable only when RoI exceeds the Cost of Debt. In that case, the firm earns more on borrowed funds than it pays as interest.
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