On the basis of the following information, answer the question :

Debt - Equity ratio of the company is :

0.6 : 1

The correct answer is Option (1) - 0.6 : 1.

Debt = 10% Debentures i.e. 12,00,000

Equity = Equity Share Capital + Preference Share Capital + Reserves 
          = 12,00,000 + 3,00,000 + 5,00,000
          = 20,00,000

Debt- equity ratio = Debt/Equity
                           = 12,00,000/20,00,000
                           = 0.6:1