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

Debt - Equity ratio of the company is:

0.6 : 1

Debt-Equity Ratio= Debts / Shareholders funds
                           = 1200000/2000000
                           = 3:5
                           = 0.6:1

Debts = 10% debentures
           = 1200000

Shareholder funds = Share capital + Reserves and surplus
                              = 1200000 + 300000 + 500000
                              = 2000000