Business Studies

Business Finance

Easy

A firm's ability to borrow at a lower rate

Decreases its capacity to employ higher debt

Increases its capacity to employ higher debt

Can or employ any amount of debt available from market

Unable to raise any amount of debt

✅ Correct Option: 2

When a firm can borrow at a lower interest rate, its cost of debt falls. Cheaper debt raises financial leverage benefits and improves debt servicing ability, so the firm's capacity to employ higher debt increases.

2026: 13 May Shift 1

Identify the factors affecting the requirement of Working Capital?

(A) Seasonal Factors

(B) Production Cycle

(D) Level of Competition

Choose the correct answer from the options given below:

2022: 20 Aug Shift 1

Given below are the examples of current Assets. Identify which of them is highly liquid?

2025: 22 May Shift 2

What does EBIT stands for:

2025: 14 May Shift 2

Which of the following is a long-term source of finance?

2026: 13 May Shift 1

How much of the profits earned by a company will be distributed as profit and how much will be retained in the business is affected by many factors. Identify which of the factor listed below is incorrect:

2026: 29 May Shift 2

"Interest coverage ratio" can be computed as:

A firm's ability to borrow at a lower rate

Solution

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CUET Business Studies Past Year Questions (Topic-Wise)