Question

The directors of a company decided to issue debentures worth Rs. 70,00,000 in order to
finance their expansion plans. This would lead to increase in the debt equity ratio from
to 3:1 but at the same time would increase the earning per share.(6)
(a) Which financial decision is being taken by the directors?
(b) Which concept of financial management is referred to?
(c) Discuss four factors that they need to consider before taking this decision.

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Answer 1

Explanation:

The Three Things to Consider When Making Life Decisions

1. Weigh the pros and cons. Make a list of what's good about the decision and what isn't. ...
2. Listen to your gut. ...
3. Consider the impact on others