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Question

A company's earning before interest and tax is Rs. 7 lac. It pays 10% interest on its debt. Total investment of company is Rs. 50 lac. Name the concept related to this.



Correct Answer
A

Trading on equity 

Your Answer
B

Debt Effect

Your Answer
C

Trading on shares 

Your Answer
D

None of the above


Solution

The correct option is B

Trading on equity 


The concept is leverage effect or trading on equity.

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