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CAPE Management of Business Unit 1 · 2005 · Paper 1 · Question 12(b)

A company currently has a long-term debt to equity ratio of 3:5.

Explain ONE financial consequence to the company, of increasing the ratio to 4:5.

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Other parts of this question

  1. 12(a)Distinguish between 'debt' and 'equity'.[2 marks]

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