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2.4 Financial markets and monetary policy (A-level only)

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Question 32

A technology firm has an issued share capital of £2.5 million and outstanding corporate bonds of £400,000. To fund a new research and development project, the company issues additional corporate bonds worth £600,000.

All other things being equal, after the issue of the additional corporate bonds, the ratio of the company's total debt to its equity will be:

0.16:10.16:10.16:1

0.24:10.24:10.24:1

0.40:10.40:10.40:1

2.50:12.50:12.50:1

2.4 Financial markets and monetary policy (A-level only) Questions

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  3. /2.4 Financial markets and monetary policy (A-level only)