Question
Sanghvi & Sons P. Ltd. is a private limited company with almost 80% shareholding with the Sanghvi family. It has now a requirement of Rs.
Sanghvi & Sons P. Ltd. is a private limited company with almost 80% shareholding with the Sanghvi family. It has now a requirement of Rs. 400 crores for a project to be undertaken. Currently it has a debt-equity ratio of about 1.5:1. The management of the company feels that a ratio of up to 2:1 is acceptable.
Discuss whether the company should fund its requirements by Debt or Equity and various considerations for the same.
Step by Step Solution
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Step: 1
Based on the given information Sanghvi Sons P Ltd has an 80 shareholding with the Sanghvi family and a current debtequity ratio of about 151 The management feels that a ratio of up to 21 is acceptable ...
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Smith and Roberson Business Law
Authors: Richard A. Mann, Barry S. Roberts
15th Edition
1285141903, 1285141903, 9781285141909, 978-0538473637
