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easyMCQCUET Accountancy 2025 22 May Shift 22026Accountancy
1 mark

The standard Debt-Equity ratio is:

  1. A
    2:1
  2. B
    1:1
  3. C
    1:2
  4. D
    4:1

Solution & Step-by-step Explanation

The Debt-Equity ratio evaluates the long-term solvency safety cushion of an enterprise. A standard, universally accepted safe norm for the Debt-Equity ratio is . This signifies that external long-term debts up to double the size of shareholders' internal equity capital is considered safe and acceptable.

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The standard Debt-Equity ratio is:
A
2:1
B
1:1
C
1:2
D
4:1

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