Accountancy, asked by Nehanonaasrani3478, 9 months ago

What is trading on equity in management accounting?

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Answered by Anonymous
3

Answer:

Trading on Equity is a financial process that involves taking more debt to boost the return of the shareholders. Trading on Equity occurs when a company takes new debt, in the form of bonds, preferred stock, or loans etc. ... So, the company basically takes advantage of the equity to borrow funds on reasonable terms.

Answered by Anonymous
14

Trading on equity occurs when a company incurs new debt (such as from bonds, loans, or preferred stock) to acquire assets on which it can earn a return greater than the interest cost of the debt.

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