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During the year, ACo made a bonus issue ofshares to its shreholders. What is the impact of this upon the gearing ratio ? The gearing

During the year, ACo made a bonus issue ofshares to its shreholders.

What is the impact of this upon the gearing ratio ?

  1. The gearing ratio will increase
  2. It is not possible to determine the impact on the gearing ratio as there is insufficient information available
  3. The gearing radio will decrease
  4. There will be no change to the gearing radio

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