Smith and John Ltd is a company manufacturing cement. The company has earned 10% return after employing capital of Rs.40 , 00,000. Half of this amount is arranged by the company by issuing 10% debentures. The company has asked your opinion whether the company has financial risk or not. Identify the concept which you will use and show your workings clearly. Also give one demerit of the concept used by you.
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The company has earned 10% return after employing capital of Rs.40 , 00000. ... Half of this amount is arranged by the company by issuing 10% debentures. The company has asked your opinion whether the company has financial risk or not.
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