Question

A company has a Debt-to-Equity ratio of 2:1. It purchases a new plant for ₹5,00,000, financing it entirely by taking a long-term loan. What will be the new Debt-to-Equity ratio?

A Higher than 2:1
B Lower than 2:1
C Remains 2:1
D Cannot be determined
E Becomes 1:1
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