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2 marksThe Need for Capital and Sources of Finance

CAPE Management of Business Unit 1 · 2002 · Paper 1 · Question 15(b)

Explain how the gearing ratio could assist the management of Afrique Soap Company Ltd when deciding between using additional equity capital or loan capital.

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  1. 15(a)What is meant by 'gearing ratio'?[1 mark]

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