Financial Management

1:

Assertion (A) : High capital gearing leads to greater speculation.

Reason (R) : Proportion of equity share capital in relation to the total capital comprising the other securities is small leading to capitalisation being highly geared.

A.

Both A and R are true and R is the correct explanation of A

B.

Both A and R are true but R is not a correct explanation of A

C.

A is true but R is false

D.

A is false but R is true

 

Answer : D

Explanation :

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Option: A

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