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What do you mean by trading …

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What do you mean by trading on equity??

Posted by Kanika Agrawal 6 years, 11 months ago

CBSE > Class 12 > Business Studies

2 answers

Vishal Baisla 6 years, 11 months ago

Rate of interest (ROI) is more than the cost of dept it is called trading on equity

Gaurav Seth 6 years, 11 months ago

Trading on Equity: Trading on equity means to raise fixed cost capital (borrowed capital and preference share capital) on the basis of equity share capital so as to increase the income of equity shareholders. Although it is possible only when the rate of return of the company is greater than the rate of interest on borrowed capital or the rate of dividend on preference shares.

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