More of Borrowed fund used in capital is safety” if the statement is Right B

More of Borrowed fund used in capital is safety” if the
statement is Right Briefly Discuss or if it is wrong
justify your answers

Question Posted / anand.mnj

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More of Borrowed fund used in capital is safety” if the statement is Right Briefly Discuss or if..

Answer / r k sethi

When borrowing made to augment capital, ensure that you
have in mind to make repayment of that liability in order
to be in business even in bad times. Risk in business
should be born by equity holders, not by lenders/
creditors.

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More of Borrowed fund used in capital is safety” if the statement is Right Briefly Discuss or if..

Answer / anshu

no i dont agree with the given statement becauze .
i bad times ,when liquidity is less these borrwed funds
still stand as a libility ,which is not the case with
equity..so it is safer to play thru the equity route

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