Q. 45. When Debt to Equity Ratio is 2, State, giving reason, whether this ratio will increase, decrease or will have no change in each of the following cases:
(i) Sale of Land (Book value ₹ 4,00,000) for ₹ 5,00,000;
(ii) Issue of Equity Shares for the purchase of Plant and Machinery worth ₹ 10,00,000;
(ii) Issue of Preference Shares for redemption of 13% Debentures, worth ₹ 10,00,000.
[Ans.: (i) Decrease; (ii) Decrease; (iii) Decrease.]
Solution:-
