If debt-equity ratio is 2:1 and total assets ₹12,00,000, long-term debt is: (Assume no current liabilities) MCQ with Answer and Explanation

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If debt-equity ratio is 2:1 and total assets ₹12,00,000, long-term debt is: (Assume no current liabilities)

A. ₹4,00,000

B. ₹2,00,000

C. ₹8,00,000

D. ₹6,00,000

Answer: Option C

Solution (By JKSSB Mock Tests)

Total assets = Equity + Debt (since no CL). D/E = 2, so D=2E. E + 2E = 12L => 3E=12 => E=4L, D=8L.

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