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Question
| Long-term Borrowings | ₹ 24,00,000 |
| 10% Debentures | ₹ 12,00,000 |
| Bills Payable | ₹ 3,00,000 |
| Debt-Equity Ratio | 1.2 |
Shareholder’s Funds will be:
Options
₹ 20,00,000
₹ 28,80,000
₹ 30,00,000
₹ 32,50,000
MCQ
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Solution
₹ 20,00,000
Explanation:
Debt Equity Ratio = `"Long term Debts"/"Shareholder’s Funds"`
1.2 = `(24,00,000)/"Shareholder’s Funds"`
Shareholder’s Funds = `(24,00,000)/1.2`
= ₹ 20,00,000
Note: 10% Debentures of ₹ 12,00,000 are already included in Long-term Borrowings of ₹ 24,00,000.
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