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What is Meant by Trading on Equity? - Business Studies

What is meant by Trading on Equity?

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Solution

Trading on equity is a practice wherein the proportion of debt in the capital structure is increased such that the earnings per share increase.

Concept: Concept of Capital Structure
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2016-2017 (March) Foreign Set 1
Q 6
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2016-2017 (March) Foreign Set 1 (with solutions)
Q 6 | 1 mark
2016-2017 (March) Foreign Set 2 (with solutions)
Q 3 | 1 mark
2016-2017 (March) Foreign Set 3 (with solutions)
Q 2 | 1 mark
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