General Studies · Gearing Ratio
If Gamma Co. and Delta Co. both have $500 million in total non-current debt, but Gamma Co. has a significantly larger equity base due to asset revaluation, which of the following statements is true regarding their Gearing Ratios (Debt/Equity)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Gearing Ratios cannot be determined without current liability information.
- 2Their Gearing Ratios are completely identical.
- 3Delta's Gearing Ratio is higher than Gamma's.✓
- 4Gamma's Gearing Ratio is higher than Delta's.
Correct answer
Delta's Gearing Ratio is higher than Gamma's.
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