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A company borrows $10,000 repayable in five years’ time and immediately uses the loan to repay its
overdraft.
What will be the effect on the company’s capital gearing and current ratios?
Capital gearing Current ratio
A Increase Increase
B Increase Decrease
C Decrease Increase
D Decrease DecreaseI did not understand why the capital gearing ratio got increased
Thnx in advance..
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