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Commerce · Q702

Business Finance

Graduate and Post Graduate · Commerce · question 702

Q702

Which of the following is an implicit cost of increasing proportion of debt of a company?

A.
P.E.Ratio of the company would increase
B.
Rate of return of the company would decrease
C.
Tax-shield would not be available on new debts
D.
Equity shareholders would demand a higher return
Answer

Answer: Option D

Solution

Answer: Option D
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